Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(Activity ratios) The following financial information is for Ambroise Industries Inc.: 2020 2019 Sales $5,000,000 $4,500,000 Cost of goods sold 2,250,000 2,025,000 Accounts receivable 585,500

(Activity ratios) The following financial information is for Ambroise Industries Inc.:

2020 2019
Sales $5,000,000 $4,500,000
Cost of goods sold 2,250,000 2,025,000
Accounts receivable 585,500 558,800
Inventory 770,800 707,400
Accounts payable 200,750 195,250
Total assets 1,875,200 1,690,500

Ambroise is a distributor of auto parts operating in eastern Ontario that offers 30-day terms and has all sales on credit. The company has a large inventory due to the number of parts it stocks for different makes and models of cars. Most of its suppliers offer terms of 30 days, and Ambroise tries to stay on good terms with its suppliers by paying on time.

Q:How does average time taken by Ambroise to collect its accounts receivable compare with the credit terms that the company offers?

Average collection period 41.8 days

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting An Introduction To Cost Management Systems

Authors: Philip Jagolinzer

1st Edition

0324015828, 978-0324015829

More Books

Students also viewed these Accounting questions