nsu fin5130 quiz 5 latest 2017 october

QUIZ 5 Question 1 Month Sales $ Month Sales $ Jan 34 925 July 19 774 Feb 16 394 Aug 36 030 Mar 36 030 Sep 34 925 Apr 19 774 Oct 36 030 May 34 925 Nov 16 394 June 16 394 Dec 19 774 The company has estimated expenses as follows: General and administrative expenses: $5 145 Material purchases are 67 percent of sales. Material purchases are paid in the month following the purchase. Interest payment per month: $3 766 Rent expenses per quarter starting March: $2 624 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. Question 2 As of this morning your firm had a ledger balance of $4 201 with no outstanding deposits or checks. Today your firm deposited 7 checks in the amount of $494 each and wrote a check in the amount of $976. 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. Question 3 Compute the Accounts Payable (A/P) period based on the following information: Average A/P balance = $47 450 Annual Cost of Goods Sold = $124 006 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. ) Question 4 Which one of the following is most indicative of a flexible shortterm financial policy? Answers: Relatively high ratio of current assets to total assets Relatively low level of liquidity Relatively low level of inventory Relatively low level of accounts receivable Relatively high ratio of short-term debt to total debt Question 5 As of this morning your firm had a ledger balance of $4 119 with no outstanding deposits or checks. Today your firm deposited 6 checks in the amount of $420 each and wrote 4 checks in the amount of $835 each. 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. Question 6 Month Sales $ Month Sales $ Jan 10 224 July 41 353 Feb 10 307 Aug 16 116 Mar 16 116 Sep 10 224 Apr 41 353 Oct 16 116 May 10 224 Nov 10 307 June 10 307 Dec 41 353 Sales are collected as follows: In the month of Sales: 34% In the next month: 23% After 2 months: 12% 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. Question 7 Month Sales $ Month Sales $ Jan 26 600 July 40 932 Feb 17 553 Aug 18 383 Mar 18 383 Sep 26 600 Apr 40 932 Oct 18 383 May 26 600 Nov 17 553 June 17 553 Dec 40 932 Sales are collected as follows: In the month of Sales: 44% In the next month: 31% After 2 months: 13% 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. Question 8 ABC Corporation currently has an inventory turnover of 43.84 a payables turnover of 8.08 and a receivables turnover of 8.22. 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. Question 9 Identify a source of cash from below. Choose only one. Answers: Decrease in accounts receivable Increase in fixed assets decrease in current liabilities increase in inventory decrease in long-term debt Question 10 ABC Company has annual sales of $400 000 and cost of goods sold of $193 013. The accounts payable period is 33.8 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. Question 11 Which of the following is a Source of Cash? Choose only one. Answers: decrease in equity Increase in long-term debt Increase in current assets decrease in current liabilities Increase in fixed assets Question 12 Identify which of the following will increase the operating cycle. Choose only one. Answers: decrease in average collection period decrease in accounts payable period decrease in days’ sales in inventory decrease in accounts payable turnover ratio Decrease in inventory turnover ratio Question 13 Month Sales $ Month Sales $ Jan 29 180 July 44 869 Feb 25 489 Aug 34 089 Mar 34 089 Sep 29 180 Apr 44 869 Oct 34 089 May 29 180 Nov 25 489 June 25 489 Dec 44 869 Sales are collected as follows: In the month of Sales: 29% In the next month: 32% After 2 months: 6% 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. Question 14 On July 15th you purchased $10 000 worth of goods. The terms of the sale were 3/8 net 55. 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. Question 15 ABC Company has a cash cycle of 12.26 days an operating cycle of 22.48 days and an average collection period of 5 days. The company reported cost of goods sold of $239 688. 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 Question 16 ABC Company writes 267 checks a day for an average amount of $405 each. These checks generally clear the bank in 5 days. In addition the firm generally receives an average of $148 608 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. Question 17 The terms of the sale were 4/17 net 61. 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. Question 18 ABC Company has annual sales of $310 954 and cost of goods sold of $198 600. The average accounts receivable balance is $104 720. 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. Question 19 Compute the cash cycle based on the following information: Average Collection Period = 65 Accounts Payable Period = 25 Average Age of Inventory = 78 Question 20 ABC Company has an average collection period of 37 days and factors all of its receivables immediately at a 1.7 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. Question 21 ABC Corporation currently has an inventory turnover of 28.7 a payables turnover of 22.1 and a receivables turnover of 12.75. 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. Question 22 Indicate the effect of the following on the cash cycle: Customers take longer to make the payment Answers: Decrease Increase No change Question 23 Indicate the effect of the following on the operating cycle: Accounts payable goes up Answers: Increase No change Decrease Question 24 Indicate the effect of the following on the cash cycle: Accounts payable period goes up Answers: Increase No change Decrease