Average Inventory conversion period
Q: is the sum of beginning inventory and net purchases during the period.
A: Net purchases means All purchases less purchase returns and trade discounts
Q: When using a perpetual inventory system and the weighted-average inventory costing method, when does…
A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…
Q: What is Sixten's EOQ and average inventory for the year?
A: EOQ is the economic order quantity which is that order of quantity which has been ordered by the…
Q: Explain the calculation procedures for and significance of each of the following: a. Return on…
A: a. Return on sales: It is a financial ratio that state how efficiently an organization is earning…
Q: the difference between periodic inventory and perpetual inventory.
A: Inventory system of book keeping means where proper books of account relating to inventory has been…
Q: Describe diff erent inventory valuation methods (cost formulas).
A: The manner in which an organization calculates the product costs (inventory value assessment)…
Q: Compute for Unrealized gross profit in ending inventory- current yr. *
A: Gross profit is the profit which is earned by the company when from the sales all costs of goods…
Q: Inventory turnover times
A: Inventory Turnover - Inventory turnover is the number of times an entity sold its finished goods or…
Q: Give examples of costs included in annual carrying costs of inventory when using the EOQ decision…
A:
Q: Which inventory costing method is almost always done on a perpetual basis?A. specific…
A: There are two type of inventory systems that are being used. One is perpetual inventory system and…
Q: Which of the following inventory cost flow assumptions produces the same ending inventory values…
A: Periodic inventory system is a system where inventory records are updated on a periodic basis but in…
Q: Which of the following inventory cost flow assumptions produces the same ending inventory values…
A: Periodic Inventory System : In periodic inventory system ending balance of inventory will be updated…
Q: Based on the following data for the current year, what is the inventory turno-
A: Answer: Option d
Q: The inventory costing method that reports the most current prices in ending inventory is Oa. average…
A: LIFO: LIFO stands for Last-In, First-Out. In this method inventory purchased at last will be sell…
Q: Describe a Comparison of the Perpetual and Periodic Inventory Systems
A:
Q: Which inventory costing method results in the lowest net income during a period of rising inventory…
A: Answer:LIFO is the correct option
Q: If ABC uses the average retail method, how much would the estimated ending inventory be?
A: Retail Inventory method is used to verify the Ending Inventory Value. There are 2 methods: Average…
Q: Required Inventory turnover the current ratio is current ratio is current ratio is the current ratio…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Define total inventory costs (TIC)
A: The formula to compute total inventory cost as follows:
Q: Inventory valuation is the cost associated with an entity's inventory at the end of a reporting…
A: Introduction: Inventory is a type of asset that is sold during daily business operations.. Inventory…
Q: a. Compute the inventory turnover ratio (ITR). b. Compute the weeks of supply (WS).
A: Inventory Turnover Ratio (ITR) = Cost of Goods sold/Total Inventory Total Inventory = Value of…
Q: Weighted Average Cost (Periodic) Units Cost Goods Available for Sale Cost of Goods Sold Ending…
A: Inventory Valuation: It is an asset held for sale in the ordinary course of business. It is used in…
Q: (A) What is the annual ordering ost of the company's current inventory policy? (B) What is the…
A: The economic order quantity (EOQ) is a quantity that a company should buy to minimize its cost of…
Q: How would you interpret an inventory turnover ratio of 12.4?
A: The question is based on the concept of ratio analysis and an inventory turnover ratio. Inventory…
Q: Which inventory costing method results in the lowest net income during a period of rising inventory…
A: In case of LIFO method, most of the cost of goods sold is calculated at the latest price since the…
Q: Define average days in inventory.
A: Definition: Inventory turnover: This is the ratio that analyzes the number of times inventory is…
Q: When a company organizes its inventory based on its relative importance, it is using Select one: O…
A: ABC analysis is a technique for material management. It is categorization of items into 3 categories…
Q: 1. Prepare the income statement to reflect lower of cost or net realizable value valuation of the…
A: Lower of cost or NRV concept means the inventory should be reported at cost of NRV, whichever is…
Q: Under which inventory cost flow assumption is the cost of the most recent purchase matched first…
A: >There are various method that can be sued to record the flow of cost to match with the sales…
Q: Define the following terms: inventory conversion period, averagecollection period, and payables…
A: Inventory conversion period: The time between the day when the materials are purchased and the day…
Q: During a period of rising prices, which U.S. GAAP inventory method reports the most current…
A: Definition:
Q: An increasing inventory turnover ratioa. Indicates a longer time span between the ordering…
A: Increased inventory turnover ratio:- It indicates companies are quickly selling their goods in the…
Q: Question: Explain the First-In, First-Out (FIFO) method used for determining COGS and Ending…
A: The inventory can be valued using various methods as FIFO, LIFO, average method.
Q: Which inventory costing method assigns to ending merchandise inventory the newest— the most…
A: The LIFO (last-in, first-out) method of inventory costing assumes that the costs of the most recent…
Q: Compute for each year the inventory turnover. (R
A: Compute the cost of goods sold in 2020.
Q: Define weighted average inventory valuation method
A: There are 7 different method of issue of inventory, 1. First in First Out 2. Last in first out 3.…
Step by step
Solved in 3 steps
- Amman Ltd. is a manufacturing company that produces paper cups and plates in Nizwa. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payment by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the Average payment period from the following financial data. The company had an opening stock of OMR 20,000 during the last year and made a total purchase of 48,000 OMR. The company has returned OMR 3000 worth material due to quality issues. During the last year, the business has paid OMR 6000 as wages and OMR 8000 as salaries. The company sold goods for a total amount of OMR 70,000 of which OMR 30,000 sales was on cash basis.…Akkudu Ltd, is a manufacturing company that produces electronic gadgets in bulk quantities for its customers in Oman. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payment by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the average payment period from the following financial data. During the last year the company started its operations with an opening stock of OMR 22,000 and made a purchase of 50,000 OMR. The company has returned OMR 5000 worth material due to quality issues. During the last year, the business has paid OMR 6000 as wages. The company sold goods for a total amount of OMR 80,000 of which OMR 50,000…Lulu hyper market in Nizwa had faced a serious cash crunch during the last vear due to the pandemic. In the vear 2021 the business wants to improve its internal performance and needs to account for the exact money has to be floated as working capital in order to fuel the increased activities of the business. The finance department had provided with the following information to the management accounting team to work out the Average payment period. The business has started its operations in the last year with an opening stock of OMR 5,000 and purchased OMR 20,000 worth goods from its supplier. Later, the busines OMR 40,000 out of which OMR 15,000 was on cash basis. The finance department has also provided with the following details s has rejected OMR 2,000 worth goods after the quality check conducted by the stores department. The total sales of the company for the year 2020 was Debtors at the beginning 8.000 12.000 Creditors at the beginning Creditors at the end Stock at the end 6,000…
- Ethical Issue: Moss Exports is having a bad year. Net Income is only $60,000. Also, two important overseas customers are falling behind in their payments to Moss, and Moss's Accounts Receivable are ballooning (these two customers owe Moss $80,000 combined). The company desperately needs a loan. The Moss Exports Board of Directors is considering ways to put the best face on the company's financial statements. Moss's bank closely examines cash flow from operating activities. Daniel Peavey, Moss's Controller, suggests reclassifying the receivables from the two overseas customers as long-term assets. He explains to the Board that removing the $80,000 increase in Accounts Receivable from current assets will increase the net cash provided by operations.This approach may help get Moss the loan. 1. Using only the amounts given, compute net cash provided by operations, both without and with the reclassification of the receivables. Which reporting makes Moss look better? In showing your math,…In this scenario, Finance is facing a negative cash position. Currently the department is both issuing and retiring $6,000 of long-term debt. Use the sliders below to reassess the company's financing decisions and protect against an Emergency Loan. Task Question You have invested $6,000 in plant improvements and financed $6,000 Long-Term debt to pay for it. You have also elected to retire $6,000 of Long- Term Debt. Now, your closing cash position reads -$3,000. Retire Long Term Debt $0 Issue Long Term Debt $0 $3,600 $6,000 $10,000 $10,000 Closing Cash Position ($5,400) Hint Submit Total Raised Capital: $6,000 Spence 0 Starting Cash Position January 1, 2019 Cash Flow Cash from Operating Cash from Investing Cash from Financing . Dividends Paid • Issue Stock . Retire Stock .Net Change in Cument Debt • Issue Long-Term Debt . Retire Long-Term Debt Closing Cash Position December 31, 2019 Total Spent Capital: $6,000 $3,431 ($6,431) $0 SO $0 $0 $0 $0 $6,000 ($6,000) ($3,000) K Click to Expand✓…You are the financial controller of Pack West (Pty) Ltd. Your company is experiencing difficulties with their cash flows owing to the Covid-19 uncertainty. At the end of April 2022, you noticed that the total sales of the company keep decreasing while the total cost are relatively stable, and you are worried that the company will not have sufficient funds to pay the salaries of R50 000 for April.You have the following historical information at your disposal:Total sales were R125 000 in January, R115 000 in February, and R110 000 and R95 000 for March and April, respectively. Historical information shows that 70% of the total sales are for cash and the debtors pay as follows:50% of the total debt one month after the sale, 30% in the following month and 20% in the third month after the sale.The total purchases for January were R100 000, R110 000 in February, and R100 000 and R105 000 for March and April, respectively. 30% of the total purchases are paid in cash and the rest of the…
- Vaughn Manufacturing is a growing company whose ability to raise capital has not been growing as quickly as its expanding assets and sales. Vaughn Manufacturing’s local banker has indicated that the company cannot increase its borrowing for the foreseeable future. Vaughn Manufacturing’s suppliers are demanding payment for goods acquired within 30 days of the invoice date, but Vaughn Manufacturing’s customers are slow in paying for their purchases (60–90 days). As a result, Vaughn Manufacturing has a cash flow problem.Vaughn Manufacturing needs $144,200 to cover next Friday’s payroll. Its balance of outstanding accounts receivable totals $838,100. To alleviate this cash crunch, the company sells $161,000 of its receivables.Record the entry that Vaughn Manufacturing would make. (Assume a 2% service charge.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) ACCOUNT TITLES AND EXPLANATION account title debit…Which of the following transactions would decrease total current assets, increase the current ratio, and have no effect on net income? Borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year. O Federal income tax due for previous year is paid. O Use cash to repurchase some of the company's own stock. O Marketable securities are sold below cost.David Lyons, CEO of Lyons Solar Technologies, is concerned about his firms level of debt financing. The company uses short-term debt to finance its temporary working capital needs, but it does not use any permanent (long-term) debt. Other solar technology companies have debt, and Mr. Lyons wonders why they use debt and what its effects are on stock prices. To gain some insights into the matter, he poses the following questions to you, his recently hired assistant: e. Suppose the expected free cash flow for Year 1 is 250,000 but it is expected to grow faster than 7% during the next 3 years: FCF2 = 290,000 and FCF3 = 320,000, after which it will grow at a constant rate of 7%. The expected interest expense at Year 1 is 128,000, but it is expected to grow over the next couple of years before the capital structure becomes constant: Interest expense at Year 2 will be 152,000, at Year 3 it will be 192,000 and it will grow at 7% thereafter. What is the estimated horizon unlevered value of operations (i.e., the value at Year 3 immediately after the FCF at Year 3)? What is the current unlevered value of operations? What is the horizon value of the tax shield at Year 3? What is the current value of the tax shield? What is the current total value? The tax rate and unlevered cost of equity remain at 25% and 14%, respectively.
- Waterway Industries is a growing company whose ability to raise capital has not been growing as quickly as its expanding assets and sales. Waterway Industries's local banker has indicated that the company cannot increase its borrowing for the foreseeable future. Waterway Industries's suppliers are demanding payment for goods acquired within 30 days of the invoice date, but Waterway Industries's customers are slow in paying for their purchases (60-90 days). As a result, Waterway Industries has a cash flow problem. Waterway Industries needs $147,100 to cover next Friday's payroll. Its balance of outstanding accounts receivable totals $767,100. To alleviate this cash crunch, the company sells $164,200 of its receivables. Record the entry that Waterway Industries would make. (Assume a 2% service charge.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit CreditLetni Corporation engages in the manufacture and sale of semiconductor chips for the computing and communications industries. During the past year, operating revenues remained relatively flat compared to the prior year but management notices a big increase in accounts receivable. The increase in receivables is largely due to the recent economic slowdown in the computing and telecommunications industries. Many of the company’s customers are having financial difficulty, lengthening the period of time it takes to collect on accounts. Below are year-end amounts. Age Group OperatingRevenue AccountsReceivable AverageAge AccountsWritten Off Two years ago $1,160,000 $136,000 5 days $0 Last year 1,460,000 146,000 7 days 1,000 Current year 1,560,000 316,000 40 days 0 Paul, the CEO of Letni, notices that accounts written off over the past three years have been minimal and, therefore, suggests that no allowance for…Letni Corporation engages in the manufacture and sale of semiconductor chips for the computing and communications industries. During the past year, operating revenues remained relatively flat compared to the prior year but management notices a big increase in accounts receivable. The increase in receivables is largely due to the recent economic slowdown in the computing and telecommunications industries. Many of the company’s customers are having financial difficulty, lengthening the period of time it takes to collect on accounts. Below are year-end amounts. Age Group OperatingRevenue AccountsReceivable AverageAge AccountsWritten Off Two years ago $ 1,160,000 $ 136,000 5 days $ 0 Last year 1,460,000 146,000 7 days 1,000 Current year 1,560,000 316,000 40 days 0 Paul, the CEO of Letni, notices that accounts written off over the past three years have been minimal and, therefore, suggests that no allowance for uncollectible accounts be…