Question
The Brenmar Sales Company had a gross profit margin (gross profits sales) of 27% and sales of $9.6 million last year. 80% of the firm's
The Brenmar Sales Company had a gross profit margin (gross profits sales) of 27% and sales of $9.6 million last year. 80% of the firm's sales are on credit, and the remainder are cash sales. Brenmar's current assets equal $1.7million, its current liabilities equal $297,400,and it has $107,300 in cash plus marketable securities.
a. If Brenmar's accounts receivable equal $563,400, what is its average collection period?
b. If Brenmar reduces its average collection period to 20 days, what will be its new level of accounts receivable?
c.Brenmar's inventory turnover ratio is 9.8 times. What is the level of Brenmar's inventories?
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