Question
Encik Adam, asthenewly appointed accounts executive of Inanam Cerah SdnBhd wasassignedthetasktoanalyse thecashflow of thecompany.Thefollowing information hasbeenprovidedbyhissuperiorforyeartheended31December2022. RM Sales (40%credit) 660,000 Costofgoodssold 360,000 Opening inventory 30,000
- Encik Adam, asthenewly appointed accounts executive of Inanam Cerah SdnBhd wasassignedthetasktoanalyse thecashflow of thecompany.Thefollowing information hasbeenprovidedbyhissuperiorforyeartheended31December2022.
RM | |
Sales (40%credit) | 660,000 |
Costofgoodssold | 360,000 |
Opening inventory | 30,000 |
Closinginventory | 33,000 |
Account receivable | 22,000 |
Account payable | 38,000 |
Notes:Assume360daysperyear.
Required:
- Calculatethecashconversioncycle.
(4marks)
- Calculate theannualsavings if theannual outlay isRM1,800,000 and CCC is shortened by5 days andtheinterestcharge onborrowings is 8%.
(3marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the Cash Conversion Cycle CCC we use the formulaCCC Days Inventory Outstanding DIO Days ...
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Step: 2
Step: 3
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Advanced Financial Accounting
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
6th edition
013703038X, 978-0137030385
