COMPREHENSIVE PROBLEMS (10 points each) 1. Optimum Cah Balance. Silvertsone Corporation expects to make even monthly cash payments of P 250,000.00 P300 per cash during the year. The average return on financial investm ent is 6% per annum and it expects to pay transfer. Determine the following: a. Optimum Cash Balance per transaction b. Average Cash Balance c. Number of Cash Transfer per year d. Total relevant cost at the optimum cash balance e. Total relevant cash cost at the following cash transfer: . 100,000 i. 250,000 is as follows: Cost of Good Sold Average Inventory Net Sales Average Receivables Net Income 5,400,000 1,800,000 7,200,000 960,000 720,000 P a. What is the Accounts Receivable Turnover? Assuming a Business year consiting of 360 days, what is the average collection period? c. What is the Inventory Turnover? d. Assuming a Business year consiting of 360 days, what is the average number of days of inventory? e. Assuming a Business year consiting of 360 days, how many days is the operating cycle? 3. Days Sales Outstanding. Mary Kay is Considering its credit terms 3/15, net 30 to 5/10, net 30 in order to speed collections. At present, 30% of Mary Kay's customers avail the 3% discount. And the remainder will pay 10 days late. Under the new term, customers availing the discount are expected to increase to 40%, 50% pay on time without discount, and the remainder will pay 10 days late discount, 50% paid on time without Change in credit terms results to an increase in tital sales from P2.4 million to P3 million. However, sales increase also entails increase in bad debts from 3% to 5%. Variable costs comprise 75% of sales, the interest rate on funds invested in accounts receivable is 8% and the corporate tax is 35% a. What are the days' sales outstanding before and after the change? b. Calculate the discount costs before and feter the change c. Calculate tht perso cost of carrying receivables before and after the change d. Calculate the bad debts losses before and after the change e. What is the incremental profit from the change in credit terms? Should Mary Kay change is its credit terms? 4. Schedule of Cash Receipts. Roland Company's Actual Sales on Account were as follows: Sales on Account Month February March April May P 160,000 100,000 180,000 150,000 170,000 une Experience has shown that such sales are usually collected as follows Month of Sale Month After Sale Second Month after sale Never collected and written off Percent 20% 50% 25% 5% 100% Prepare schedule of Cash Receipta for the Second Quarter of the year COMPREHENSIVE PROBLEMS (10 points each) 1. Optimum Cah Balance. Silvertsone Corporation expects to make even monthly cash payments of P 250,000.00 P300 per cash during the year. The average return on financial investm ent is 6% per annum and it expects to pay transfer. Determine the following: a. Optimum Cash Balance per transaction b. Average Cash Balance c. Number of Cash Transfer per year d. Total relevant cost at the optimum cash balance e. Total relevant cash cost at the following cash transfer: . 100,000 i. 250,000 is as follows: Cost of Good Sold Average Inventory Net Sales Average Receivables Net Income 5,400,000 1,800,000 7,200,000 960,000 720,000 P a. What is the Accounts Receivable Turnover? Assuming a Business year consiting of 360 days, what is the average collection period? c. What is the Inventory Turnover? d. Assuming a Business year consiting of 360 days, what is the average number of days of inventory? e. Assuming a Business year consiting of 360 days, how many days is the operating cycle? 3. Days Sales Outstanding. Mary Kay is Considering its credit terms 3/15, net 30 to 5/10, net 30 in order to speed collections. At present, 30% of Mary Kay's customers avail the 3% discount. And the remainder will pay 10 days late. Under the new term, customers availing the discount are expected to increase to 40%, 50% pay on time without discount, and the remainder will pay 10 days late discount, 50% paid on time without Change in credit terms results to an increase in tital sales from P2.4 million to P3 million. However, sales increase also entails increase in bad debts from 3% to 5%. Variable costs comprise 75% of sales, the interest rate on funds invested in accounts receivable is 8% and the corporate tax is 35% a. What are the days' sales outstanding before and after the change? b. Calculate the discount costs before and feter the change c. Calculate tht perso cost of carrying receivables before and after the change d. Calculate the bad debts losses before and after the change e. What is the incremental profit from the change in credit terms? Should Mary Kay change is its credit terms? 4. Schedule of Cash Receipts. Roland Company's Actual Sales on Account were as follows: Sales on Account Month February March April May P 160,000 100,000 180,000 150,000 170,000 une Experience has shown that such sales are usually collected as follows Month of Sale Month After Sale Second Month after sale Never collected and written off Percent 20% 50% 25% 5% 100% Prepare schedule of Cash Receipta for the Second Quarter of the year