Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Selected information from the Financial Statements of Cloud Computing Co. for the two-years ended December 31, 2017 and 2018, were as follows: 2018 2017 Current
Selected information from the Financial Statements of Cloud Computing Co. for the two-years ended December 31, 2017 and 2018, were as follows:
2018 2017
Current ratio 2.6:1 1.5:1
Acid-test ratio 1.5:1 1:1
No. of days sales in inventory ? ?
No. of days in receivables ? ?
Inventory turnover 5 6
Receivables turnover 3 4
Increase in net sales based on 2017 10%
Based on above information:
1. Compute for the (a) no. of days sales in inventory for 2017 and 2018, and (b) no. of days in receivables for 2017 and 2018. (4 points)
2. Given the above ratios, could there be a revenue fraud in 2018? Support your conclusion. (6 points)
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