please help me with this questions they are for a finance class i do not understand.

thanks.

1. Indicate the effect of the following on the operating cycle: Accounts payable goes up Increase No change Decrease 2. Indicate the effect of the following on the cash cycle: Customers take longer to make the payment Increase No change Decrease 3. Indicate the effect of the following on the cash cycle: Accounts payable turnover goes up Increase Decrease No change 4. Compute the Accounts Payable (A/P) period based on the following information: Average A/P balance = $58,550 Annual Cost of Goods Sold = $471,893 Assume 365 days 5. ABC Corporation currently has an inventory turnover of 10.14, a payables turnover of 11.67, and a receivables turnover of 20.96. How many days are in the operating cycle? 6. ABC Company has an average collection period of 28 days and factors all of its receivables immediately at a 1.3 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing? 7. ABC Corporation currently has an inventory turnover of 12.73, a payables turnover of 14.15, and a receivables turnover of 15.62. How many days are in the cash cycle? 8. ABC Company has annual sales of $400,000 and cost of goods sold of $220,928. The accounts payable period is 29.39 days. What is the average accounts payable balance? 9. Which one of the following is most indicative of a flexible short-term financial policy? Relatively low level of liquidity Relatively low level of accounts receivable Relatively low level of inventory Relatively high ratio of current assets to total assets Relatively high ratio of short-term debt to total debt 10. As of this morning, your firm had a ledger balance of $4,524 with no outstanding deposits or checks. Today, your firm deposited 3 checks in the amount of $293 each and wrote a check in the amount of $778. What is the amount of the collection float as of the end of the day? 11. Jan Feb Mar Apr May June Month Sales $ Month Sales $ 43,896 July 47,444 33,553 Aug 47,045 47,045 Sep 43,896 47,444 Oct 47,045 43,896 Nov 33,553 33,553 Dec 47,444 The company has estimated expenses as follows: General and administrative expenses: $3,030 Material purchases are 34 percent of sales. Material purchases are paid in the month following the purchase. Interest payment per month: $3,105 Rent expenses per quarter starting March: $6,724 Calculate the cash outflows for June. 12. ABC Company writes 203 checks a day for an average amount of $423 each. These checks generally clear the bank in 3 days. In addition, the firm generally receives an average of $132,918 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm's net float? 13. ABC Company has a cash cycle of 10.83 days, an operating cycle of 20.84 days, and an average collection period of 7 days. The company reported cost of goods sold of $278,232. What is the company's average balance in Accounts Payable? 14. ABC Company has annual sales of $368,664 and cost of goods sold of $198,600. The average accounts receivable balance is $61,000. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days. 15. Which of the following is a Source of Cash? Choose only one. decrease in equity Increase in long-term debt Increase in fixed assets Increase in current assets decrease in current liabilities 16. Identify which of the following will increase the operating cycle. Choose only one. decrease in accounts payable period Decrease in inventory turnover ratio decrease in average collection period decrease in accounts payable turnover ratio decrease in days' sales in inventory 17. Sales $ Month Jan Feb Mar Apr May June 47,108 47,136 35,882 30,359 47,108 47,136 Month Sales $ July Aug Sep Oct Nov Dec 30,359 35,882 47,108 35,882 47,136 30,359 Sales are collected as follows: In the month of Sales: 40% In the next month: 27% After 2 months: 11% Remainder is considered as bad debt and is not collected. Calculate the cash collection for June. 18. Compute the cash cycle based on the following information: Average Collection Period = 38 Accounts Payable Period = 30 Average Age of Inventory = 373 19. As of this morning, your firm had a ledger balance of $4,797 with no outstanding deposits or checks. Today, your firm deposited 6 checks in the amount of $276 each and wrote 14 checks in the amount of $934. What is the amount of the disbursement float as of the end of the day? 20. Month Sales $ Month Sales $ Jan 10,570 July 49,920 Feb 43,300 Aug 42,250 Mar 42,250 Sep 10,570 Apr 49,920 Oct 42,250 May 10,570 Nov 43,300 June 43,300 Dec 49,920 Sales are collected as follows: In the month of Sales: 33% In the next month: 29% After 2 months: 13% After 3 months: remainder is collected Calculate the cash collection for November. 21. On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 2/9, net 57. What is the effective annual rate of interest for the credit period for this sale? 22. The terms of the sale were 4/16, net 68. What is the effective annual rate of interest? 23. Month Sales $ Month Sales $ Jan 27,429 July 36,678 Feb 21,817 Aug 28,455 Mar 28,455 Sep 27,429 Apr 36,678 Oct 28,455 May 27,429 Nov 21,817 June 21,817 Dec 36,678 Sales are collected as follows: In the month of Sales: 22% In the next month: 20% After 2 months: 11% After 3 months: remainder is collected Calculate the cash collection for December. 24. Identify a source of cash from below. Choose only one. decrease in long-term debt Decrease in accounts receivable increase in inventory Increase in fixed assets decrease in current liabilities FIN 5130 Quiz 5 Extra Credit Instructor: Dr. Palkar Late assignments will not be accepted so please plan accordingly. You need to show your working notes for credit. You must submit your work using excel files (with .xls or .xlsx for credit). You must upload your files on Blackboard under the Assignment Dropbox for credit. This assignment will require you to prepare the cash budget and determine the cash surplus and shortage each month. The management estimates total sales for the period January through July based on actual sales from the immediate past quarter. The following assumptions are made: Sales: Past and Expected Historical Forecast October $300,000 January November $350,000 February December $400,000 March April May June July $150,000 $200,000 $200,000 $300,000 $250,000 $200,000 $300,000 a. Sales are 75% on credit basis and 25% on cash basis. 60% of credit sales are collection one month after sale, 30% in the second month, and 10% in the third month. Bad debts are insignificant. b. Purchases are 80% of sales and are paid as follows: 50% of sales are paid in the same month and the remaining 50% are paid in the following month. c. Wages and salaries are as follows: January February March April May June d. e. f. g. h. $30,000 $40,000 $50,000 $50,000 $40,000 $35,000 Rent is $2,000 per month Interest on $500,000 of 16% bonds is due on the calendar quarter. A tax prepayment of $50,000 is due in April. A capital addition of $30,000 is planned in June. The company has a cash balance of $100,000 on January 1st, which is the minimum balance maintained each month. 1. Prepare cash budget for Jan to June. 2. Determine the cash surplus and shortages for each month. Page 1 of 1 47049 85869 3.01 2294.461 112.1098 Sales $ current Month 30- days 60-days bad debt 40% 27% 11% 12719.16 5181.88 Jan 47,108 18843.2 Feb 47,136 18854.4 Mar 35,882 Apr Month Sales $ 22% 10363.76 July 30,359 Aug 35,882 12726.72 5184.96 14352.8 9688.14 3947.02 7894.04 Sep 47,108 30,359 12143.6 8196.93 3339.49 6678.98 Oct 35,882 May 47,108 18843.2 12719.16 5181.88 10363.76 Nov June 47,136 18854.4 12726.72 5184.96 101891.6 68776.83 28020.19 june total collection 10369.92 10369.92 56040.38 Dec 47,136 30,359 198688.62 Month Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Sales $ 27,429.00 21,817.00 28,455.00 36,678.00 27,429.00 21,817.00 36,678.00 28,455.00 27,429.00 28,455.00 21,817.00 36,678.00 343,137.00 current 22% 30-days 20% 60-days 11% 90 days 47% 6,034.38 4,799.74 6,260.10 8,069.16 6,034.38 4,799.74 8,069.16 6,260.10 6,034.38 6,260.10 4,799.74 8,069.16 75,490.14 5,485.80 4,363.40 5,691.00 7,335.60 5,485.80 4,363.40 7,335.60 5,691.00 5,485.80 5,691.00 4,363.40 7,335.60 68,627.40 61,291.80 3,017.19 2,399.87 3,130.05 4,034.58 3,017.19 2,399.87 4,034.58 3,130.05 3,017.19 3,130.05 2,399.87 4,034.58 37,745.07 31,310.62 12,891.63 10,253.99 13,373.85 17,238.66 12,891.63 10,253.99 17,238.66 13,373.85 12,891.63 13,373.85 10,253.99 17,238.66 161,274.39 120,407.89 6.315789 historical month oct nov dec projected month sales credit cash sales credit cash collection-0.6 300000 225000 75000 jan 150000 112500 350000 262500 87500 135000 feb 200000 150000 400000 300000 100000 157500 mar 200000 150000 apr 300000 225000 may 250000 187500 jun 200000 150000 jul 300000 225000 collection in the first month 2nd month 37500 50000 50000 75000 62500 50000 75000 Cash Budget For Jul-2012 through Jun-2013 JAN Beginning cash balance Cash from operations FEB MAR MAY JUN JUL Total $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $700,000 $37,500 $50,000 $50,000 $75,000 $62,500 $50,000 $75,000 $400,000 67,500 90,000 90,000 135,000 112,500 90,000 $585,000 45,000 45,000 67,500 56,250 45,000 $258,750 $285,000 $310,000 $365,000 $318,750 $310,000 $1,943,750 COLLECTION AFTER 30 COLLECTION AFTER60 Total Available Cash APR $137,500 $217,500 Less: Purchases 30 days $0 $120,000 $160,000 $160,000 $240,000 $200,000 $160,000 $240,000 $1,280,000 60,000 80,000 80,000 120,000 100,000 80,000 120,000 $640,000 30,000 40,000 40,000 60,000 50,000 40,000 $260,000 30,000 40,000 50,000 50,000 40,000 35,000 2,000 2,000 2,000 2,000 2,000 2,000 60-days wages rent tax advance - - - capital addition - - - intererst - - 80,000 50,000 - ### - ### - - ### - $245,000 2,000 30,000 - $14,000 $50,000 $30,000 $80,000 Total Disbursements $212,000 $312,000 $412,000 $502,000 $402,000 $327,000 $432,000 $2,599,000 Cash Balance (Deficit) ($74,500) ($94,500) ($127,000) ($192,000) ($37,000) ($8,250) ($122,000) ($655,250) Add: Ending Cash Balance (74,500.00) (94,500.00) (127,000.00) (192,000.00) (37,000.00) (8,250.00) (122,000.00) ($655,250) 67500 90000 90000 135000 112500 90000 45000 45000 67500 56250 45000 1. Indicate the effect of the following on the operating cycle: Accounts payable goes up Increase No change Decrease 2. Indicate the effect of the following on the cash cycle: Customers take longer to make the payment Increase No change Decrease 3. Indicate the effect of the following on the cash cycle: Accounts payable turnover goes up Increase Decrease No change 4. Compute the Accounts Payable (A/P) period based on the following information: Average A/P balance = $58,550 Annual Cost of Goods Sold = $471,893 Assume 365 days Accounts payable (days) = accounts payable*365/cost of sales 365*58550/471893 =45.29 days 5. ABC Corporation currently has an inventory turnover of 10.14, a payables turnover of 11.67, and a receivables turnover of 20.96. How many days are in the operating cycle? Operating cycle = accounts receivables (days) +Inventory (days) -accounts payable (days) =365/10.14+365/20.96-365/11.67 =35.996+17.414-31.277 =22.133 6. ABC Company has an average collection period of 28 days and factors all of its receivables immediately at a 1.3 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing? Discount %/( 100-Discount %) x (360/Allowed payment days - Discount days) 1.3 %( 100-1.3%)*360/28-30 7. ABC Corporation currently has an inventory turnover of 12.73, a payables turnover of 14.15, and a receivables turnover of 15.62. How many days are in the cash cycle? Cash cycle = accounts receivables (days) +Inventory (days) -accounts payable (days) =365/12.73+365/15.62-365/14.15 =28.672+23.367-25.795 =26.24 days 8. ABC Company has annual sales of $400,000 and cost of goods sold of $220,928. The accounts payable period is 29.39 days. What is the average accounts payable balance? Accounts payable (days)= accounts payable*365/cost of sales 29.39*220928/365=17789.24 9. Which one of the following is most indicative of a flexible short-term financial policy? Relatively low level of liquidity Relatively low level of accounts receivable Relatively low level of inventory Relatively high ratio of current assets to total assets Relatively high ratio of short-term debt to total debt 10. As of this morning, your firm had a ledger balance of $4,524 with no outstanding deposits or checks. Today, your firm deposited 3 checks in the amount of $293 each and wrote a check in the amount of $778. What is the amount of the collection float as of the end of the day? Opening balance= Add deposits (293*3)= Less payment Collection float Total amount Jan Feb Mar Apr May June $4524 879 (778) 101 4625 Month Sales $ Month Sales $ 43,896 July 47,444 33,553 Aug 47,045 47,045 Sep 43,896 47,444 Oct 47,045 43,896 Nov 33,553 33,553 Dec 47,444 The company has estimated expenses as follows: General and administrative expenses: $3,030 Material purchases are 34 percent of sales. Material purchases are paid in the month following the purchase. Interest payment per month: $3,105 Rent expenses per quarter starting March: $6,724 Calculate the cash outflows for June. Mont h Sales $ materials Month Sales $ Jan 43,896 July 47,444 Feb 33,553 47,045 Mar 47,045 Aug 14924.64 11408.02 Sep Apr 47,444 47,045 May 43,896 Oct 15995.3 16130.96 Nov June 33,553 Dec 47,444 249,387.00 general expenses rent expense interest payment 14,924.64 73,383.56 43,896 33,553 249,387.00 11408.0 2 16130.9 6 15995.3 14924.6 4 15995.3 11408.0 2 85862.2 4 3,030.00 13,448.00 18630 73383.56 85862.24 194,353.80 55,033.20 11. ABC Company writes 203 checks a day for an average amount of $423 each. These checks generally clear the bank in 3 days. In addition, the firm generally receives an average of $132,918 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm's net float? Receipt 132918 Payment203*423=-85869 Net float =47049 12. ABC Company has a cash cycle of 10.83 days, an operating cycle of 20.84 days, and an average collection period of 7 days. The company reported cost of goods sold of $278,232. What is the company's average balance in Accounts Payable? Operating cycle = cash cycle+ accounts receivable-accounts payable 20.84=10.83+7-x 20.84-17.83 = x Accounts payable = cost of sales*365/days =3.01*278232/365 =2294.461 13. ABC Company has annual sales of $368,664 and cost of goods sold of $198,600. The average accounts receivable balance is $61,000. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days. Accounts receivable days = a/c receivable *365/ cost of sales =61000*365/198600 =112.1098 14. Which of the following is a Source of Cash? Choose only one. decrease in equity Increase in long-term debt Increase in fixed assets Increase in current assets decrease in current liabilities 15. Identify which of the following will increase the operating cycle. Choose only one. decrease in accounts payable period Decrease in inventory turnover ratio decrease in average collection period decrease in accounts payable turnover ratio decrease in days' sales in inventory 16. Sales $ Month Jan Feb Mar Apr May June 47,108 47,136 35,882 30,359 47,108 47,136 Month July Aug Sep Oct Nov Dec Sales are collected as follows: In the month of Sales: 40% In the next month: 27% Sales $ 30,359 35,882 47,108 35,882 47,136 30,359 After 2 months: 11% Remainder is considered as bad debt and is not collected. Calculate the cash collection for June. 1. Sales $ Month Jan 47,108 Feb 47,136 Mar 35,882 Apr 30,359 May 47,108 June 47,136 june total collection 30bad 60-days days debt 40% 27% 11% 22% 18843. 12719. 5181.8 10363. 2 16 8 76 18854. 12726. 5184.9 10369. 4 72 6 92 14352. 9688.1 3947.0 7894.0 8 4 2 4 12143. 8196.9 3339.4 6678.9 6 3 9 8 18843. 12719. 5181.8 10363. 2 16 8 76 18854. 12726. 5184.9 10369. 4 72 6 92 101891 68776. 28020. 56040. .6 83 19 38 198688 .6 current Month July Aug Sep Oct Nov Dec Sales $ 30,359 35,882 47,108 35,882 47,136 30,359 17. Compute the cash cycle based on the following information: Average Collection Period = 38 Accounts Payable Period = 30 Average Age of Inventory = 373 Cash cycle = average collection period+ average inventory - accounts payable period 373+30-38 Cash cycle =381 days 18. As of this morning, your firm had a ledger balance of $4,797 with no outstanding deposits or checks. Today, your firm deposited 6 checks in the amount of $276 each and wrote 14 checks in the amount of $934. What is the amount of the disbursement float as of the end of the day? Opening bal Add deposits 4797 (276*14) Less payment 14*934 19. Month Sales $ Month Sales $ Jan 10,570 July 49,920 Feb 43,300 Aug 42,250 Mar 42,250 Sep 10,570 3864 (934) Apr May June 49,920 Oct 10,570 Nov 43,300 Dec 42,250 43,300 49,920 Sales are collected as follows: In the month of Sales: 33% In the next month: 29% After 2 months: 13% After 3 months: remainder is collected Calculate the cash collection for November. 20. On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 2/9, net 57. What is the effective annual rate of interest for the credit period for this sale? 0.02/0.98*(360/57-9) =11.18% 21. The terms of the sale were 4/16, net 68. What is the effective annual rate of interest? Discount %/( 100-Discount %) x (360/Allowed payment days - Discount days) 0.04/(0.96)*360/68-16 15.36% 22. Month Sales $ Month Sales $ Jan 27,429 July 36,678 Feb 21,817 Aug 28,455 Mar 28,455 Sep 27,429 Apr 36,678 Oct 28,455 May 27,429 Nov 21,817 June 21,817 Dec 36,678 Sales are collected as follows: In the month of Sales: 22% In the next month: 20% After 2 months: 11% After 3 months: remainder is collected Calculate the cash collection for December. Month Jan Feb Mar Sales $ current 22% 30-days 20% 60-days 11% 90 days 47% 27,429.00 6,034.38 5,485.80 3,017.19 12,891.63 21,817.00 4,799.74 4,363.40 2,399.87 10,253.99 28,455.00 July Aug Sep Oct Nov Dec 13,373.85 36,678.00 8,069.16 7,335.60 4,034.58 17,238.66 27,429.00 6,034.38 5,485.80 3,017.19 12,891.63 21,817.00 4,799.74 4,363.40 2,399.87 10,253.99 36,678.00 8,069.16 7,335.60 4,034.58 17,238.66 28,455.00 6,260.10 5,691.00 3,130.05 13,373.85 6,034.38 5,485.80 3,017.19 12,891.63 6,260.10 5,691.00 3,130.05 13,373.85 21,817.00 4,799.74 4,363.40 2,399.87 10,253.99 36,678.00 8,069.16 7,335.60 4,034.58 17,238.66 343,137.00 June 3,130.05 28,455.00 May 5,691.00 27,429.00 Apr 6,260.10 75,490.14 68,627.40 37,745.07 161,274.39 The total collected up to Dec. = 61291.8+31310.62+120407.89 =213210.31 23. Identify a source of cash from below. Choose only one. decrease in long-term debt Decrease in accounts receivable - increase in inventory Increase in fixed assets decrease in current liabilities 11. Mont Sales $ h Mont Sales $ h Jan July Feb Mar Apr May June 43,896 33,553 47,045 47,444 43,896 33,553 Aug Sep Oct Nov Dec 47,444 47,045 43,896 47,045 33,553 47,444 The company has estimated expenses as follows: General and administrative expenses: $3,030 Material purchases are 34 percent of sales. Material purchases are paid in the month following the purchase. Interest payment per month: $3,105 Rent expenses per quarter starting March: $6,724 Calculate the cash outflows for June. 19. As of this morning, your firm had a ledger balance of $4,797 with no outstanding deposits or checks. Today, your firm deposited 6 checks in the amount of $276 each and wrote 14 checks in the amount of $934. What is the amount of the disbursement float as of the end of the day? 20. Mont Sales $ h Mont Sales $ h Jan July Feb Mar Apr May June 10,570 43,300 42,250 49,920 10,570 Aug Sep Oct Nov Dec 49,920 42,250 10,570 42,250 43,300 43,300 49,920 Sales are collected as follows: In the month of Sales: 33% In the next month: 29% After 2 months: 13% After 3 months: remainder is collected Calculate the cash collection for November. Question 1 0 out of 1 points Indicate the effect of the following on the operating cycle: Accounts payable goes up Selected Answer: Answers: Decreas e Increase No change Decreas e Response Feedback: The accounts payable period is part of the cash cycle, not the operating cycle Question 2 1 out of 1 points Indicate the effect of the following on the cash cycle: Customers take longer to make the payment Selected Answer: Increase Answers: Increase No change Decreas e Response Feedback: If customers take longer to make the payments, it will increase the average collection period, and the operating cycle and cash cycle will go up. Question 3 1 out of 1 points Indicate the effect of the following on the cash cycle: Accounts payable turnover goes up Selected Answer: Increase Answers: Increase Decreas e No change Response Feedback: If APT goes up, the accounts payable period does down. If A/P period decreases, the cash cycle will go up. Question 4 1 out of 1 points Compute the Accounts Payable (A/P) period based on the following information: Average A/P balance = $58,550 Annual Cost of Goods Sold = $471,893 Assume 365 days Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box. Selected Answer: 45.29 Correct Answer: 45.29 0.5% Response Feedback: A/P period = 365/(COGS/Accounts Payable) Question 5 0 out of 1 points ABC Corporation currently has an inventory turnover of 10.14, a payables turnover of 11.67, and a receivables turnover of 20.96. How many days are in the operating cycle? Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box. Selected Answer: 22.13 Correct Answer: 53.41 0.5% Response Feedback: Operating cycle = Inventory period + A/R Period = 365/ITR + 365/ART Question 6 0 out of 1 points ABC Company has an average collection period of 28 days and factors all of its receivables immediately at a 1.3 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing? Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. Selected Answer: 22.58 Correct Answer: 18.60 0.5% Response Feedback: Solve for effective rate Question 7 1 out of 1 points ABC Corporation currently has an inventory turnover of 12.73, a payables turnover of 14.15, and a receivables turnover of 15.62. How many days are in the cash cycle? Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box. Selected Answer: 26.24 Correct Answer: 26.24 0.5% Response Feedback: Cash cycle = Inventory period + A/R Period - A/P Period = 365/ITR + 365/ART - 365/APT Question 8 1 out of 1 points ABC Company has annual sales of $400,000 and cost of goods sold of $220,928. The accounts payable period is 29.39 days. What is the average accounts payable balance? Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box. Selected Answer: 17,789.24 Correct Answer: 17,789.24 0.5% Response Feedback: Accounts Payable Period = 365/ (COGS/Accounts Payable) Re-arranging, we get, Accounts Payable = Accounts Payable Period*COGS/365 Question 9 0 out of 1 points Which one of the following is most indicative of a flexible short-term financial policy? Selected Answer: Answers: Relatively low level of liquidity Relatively low level of liquidity Relatively low level of accounts receivable Relatively low level of inventory Relatively high ratio of current assets to total assets Relatively high ratio of short-term debt to total debt Question 10 0 out of 1 points As of this morning, your firm had a ledger balance of $4,524 with no outstanding deposits or checks. Today, your firm deposited 3 checks in the amount of $293 each and wrote a check in the amount of $778. What is the amount of the collection float as of the end of the day? Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. Selected Answer: 4,625 Correct Answer: 879.00 0.5% Response Feedback: Collection Float =total $ amount of checks deposited Question 11 0 out of 1 points Mont Sales $ h Mont Sales $ h Jan July Feb Mar Apr May June 43,896 33,553 47,045 47,444 43,896 Aug Sep Oct Nov Dec 47,444 47,045 43,896 47,045 33,553 33,553 47,444 The company has estimated expenses as follows: General and administrative expenses: $3,030 Material purchases are 34 percent of sales. Material purchases are paid in the month following the purchase. Interest payment per month: $3,105 Rent expenses per quarter starting March: $6,724 Calculate the cash outflows for June. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. Selected Answer: 140,895.44 Correct Answer: 27,783.64 0.5% Response Feedback: Suppose that material purchases are x% of sales. Purchases are paid in the month following the purchases. Therefore, purchases in May = x% of Sales of May This amount will be paid after one month in June. Therefore, cash outflows in June = x% of Sales of May + Gen & Admin Exp + Interest Expense + Rent Expense Question 12 0 out of 1 points ABC Company writes 203 checks a day for an average amount of $423 each. These checks generally clear the bank in 3 days. In addition, the firm generally receives an average of $132,918 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm's net float? Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. Selected Answer: Correct Answer: Response Feedback: 47,049 124,689.00 0.5% Net Float = Disbursement Float + Collection Float Disbursement Float = number of checks written * $check amount * number of days to clear the checks Collection Flat = $checks collected * number of days to clear the checks Question 13 0 out of 1 points ABC Company has a cash cycle of 10.83 days, an operating cycle of 20.84 days, and an average collection period of 7 days. The company reported cost of goods sold of $278,232. What is the company's average balance in Accounts Payable? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box Selected Answer: Correct Answer: Response Feedback: 2,294.461 7,630.42 0.5% Cash Cycle = Operating Cycle - Accounts Payable Period Cash Cycle = Operating Cycle - 365(1/AP Turnover) (OC-CC)=365(AP/COGS) Question 14 0 out of 1 points ABC Company has annual sales of $368,664 and cost of goods sold of $198,600. The average accounts receivable balance is $61,000. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days. Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box. Selected Answer: Correct Answer: Response Feedback: 112.1098 60.39 0.5% Average Collection Period (ACP) = 365/(Sales/Accounts Receivable) Question 15 1 out of 1 points Which of the following is a Source of Cash? Choose only one. Selected Answer: Increase in long-term debt Answers: decrease in equity Increase in long-term debt Increase in fixed assets Increase in current assets decrease in current liabilities Question 16 0 out of 1 points Identify which of the following will increase the operating cycle. Choose only one. Selected Answer: Answers: decrease in accounts payable period decrease in accounts payable period Decrease in inventory turnover ratio decrease in average collection period decrease in accounts payable turnover ratio decrease in days' sales in inventory Question 17 0 out of 1 points Mont Sales $ h Mont Sales $ h Jan July Feb Mar Apr May June 47,108 47,136 35,882 30,359 47,108 47,136 Aug Sep Oct Nov Dec 30,359 35,882 47,108 35,882 47,136 30,359 Sales are collected as follows: In the month of Sales: 40% In the next month: 27% After 2 months: 11% Remainder is considered as bad debt and is not collected. Calculate the cash collection for June. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. Selected Answer: 198,688.6 Correct Answer: 34,913.05 0.5% Question 18 0 out of 1 points Compute the cash cycle based on the following information: Average Collection Period = 38 Accounts Payable Period = 30 Average Age of Inventory = 37 Selected Answer: Correct Answer: Response Feedback: 381 45 0.5% Cash Cycle = Inventory Period + A/R Period A/P Period Question 19 1 out of 1 points As of this morning, your firm had a ledger balance of $4,797 with no outstanding deposits or checks. Today, your firm deposited 6 checks in the amount of $276 each and wrote 14 checks in the amount of $934. What is the amount of the disbursement float as of the end of the day? Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. Selected Answer: Correct Answer: Response 13,076 13,076.00 0.5% Disbursement Float =total $ amount of Feedback: checks witten Question 20 1 out of 1 points Mont Sales $ h Mont Sales $ h Jan July Feb Mar Apr May June 10,570 43,300 42,250 49,920 10,570 43,300 Aug Sep Oct 49,920 42,250 10,570 42,250 Nov Dec 43,300 49,920 Sales are collected as follows: In the month of Sales: 33% In the next month: 29% After 2 months: 13% After 3 months: remainder is collected Calculate the cash collection for November. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. Selected Answer: 38,478.1 Correct Answer: 38,478.10 0.5% Question 21 0 out of 1 points On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 2/9, net 57. What is the effective annual rate of interest for the credit period for this sale? Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. Selected Answer: 11.18 Correct Answer: 16.61 0.5% Response Feedback: Solve for effective rate Question 22 0 out of 1 points The terms of the sale were 4/16, net 68. What is the effective annual rate of interest? Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. Selected Answer: 15.36 Correct Answer: 33.18 0.5% Response Feedback: Solve for effective rate Question 23 0 out of 1 points Mont Sales $ h Mont Sales $ h Jan July Feb Mar Apr May June 27,429 21,817 28,455 36,678 27,429 21,817 Aug Sep Oct Nov Dec 36,678 28,455 27,429 28,455 21,817 36,678 Sales are collected as follows: In the month of Sales: 22% In the next month: 20% After 2 months: 11% After 3 months: remainder is collected Calculate the cash collection for December. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. Selected Answer: Correct Answer: 213,210.31 28,454.24 0.5% Question 24 1 out of 1 points Identify a source of cash from below. Choose only one. Selected Answer: Answers: Decrease in accounts receivable decrease in long-term debt Decrease in accounts receivable increase in inventory Increase in fixed assets decrease in current liabilities Tuesday, October 6, 2015 3:20:30 PM EDT