Answered step by step
Verified Expert Solution
Question
1 Approved Answer
6 9. QUESTION 6 marks) The following data available for UFO Deli Ltd. ( 7 Account Beginning Ending Balance Use/source of cash balance Accounts
6 9. QUESTION 6 marks) The following data available for UFO Deli Ltd. ( 7 Account Beginning Ending Balance Use/source of cash balance Accounts payable 27,400 25,500 Inventory 62,600 67,700 Long term debts 125,500 95,600 Common stock 220,400 245,500 Other information: The company just placed an order for 700 kg of chicken drumsticks at a unit price of $3/kg. The supplier offers credit terms of 2/15, net 45. Beginning balance of accounts receivable is $27,500. Ending balance of accounts receivable of $26,800 - Total revenue (all sales are on credit) is $287,500 Total cost of goods sold is $195,000 Required: a. What is the discount being offered by the supplier to UFO Deli Ltd. ? How quickly must the company pay to get the discount? If the company takes the discount, how much should they pay? (1 mark) b. Calculate and identify the source of cash or the use of cash for each account by filling into the column next to the ending balance (2 marks) c. Calculate the operating cycle and interpret the outcome (4 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started