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59) Heritage Farms has sales of $1.62 million with costs of goods sold equal to 78 percent of
sales. The average inventory is $369,000, accounts payable average $438,000, and receivables
average $147,000. How long is the cash cycle?
A) 13.19 days
B) 13.30 days
C) 17.29 days
D) 7.54 days
E) 11.77 days
60) Bilt Rite has sales of $610,000 and cost of goods sold equal to 68 percent of sales. The
beginning accounts receivable balance is $58,900 and the ending accounts receivable balance is
$61,050. How long on average does it take the firm to collect its receivables?
A) 35.89 days
B) 44.09 days
C) 41.07 days
D) 25.98 days
E) 26.52 days
61) Amanda's Interior Design has credit sales of $783,000, costs of goods sold of $418,000, and
average accounts receivable of $107,900. How long does it take its credit customers to pay for
their purchases?
A) 36.09 days
B) 50.30 days
C) 31.23 days
D) 35.20 days
E) 27.95 days
62) Modern Sound has sales of $811,000 and average accounts payable of $87,400. The cost of
goods sold is equivalent to 72 percent of sales. How long does it take the firm to pay its
suppliers?
A) 41.46 days
B) 33.45 days
C) 48.69 days
D) 66.18 days
E) 54.63 days
63) Young's had a beginning accounts payable balance of $42,900 and an ending accounts
payable balance of $44,800. Sales for the period were $770,000 and costs of goods sold were
$598,000. If the operating cycle is 129 days, how long is the firm's cash cycle?
A) 102.24 days
B) 79.35 days
C) 97.13 days
D) 81.19 days
E) 107.78 days
64) A firm has an inventory turnover rate of 15.7, a receivables turnover rate of 20.2, and a
payables turnover rate of 14.6. How long is the cash cycle?
A) 28.46 days
B) 16.32 days
C) 32.87 days
D) 13.08 days
E) 23.37 days
65) Brown's Market currently has an operating cycle of 76.8 days. It is planning some
operational changes that are expected to decrease the accounts receivable period by 2.8 days and
decrease the inventory period by 3.1 days. The accounts payable turnover rate is expected to
increase from 9 to 11.5 times per year. If all these changes are adopted, what will be the firm's
new operating cycle?
A) 68.4 days
B) 73.4 days
C) 63.3 days
D) 57.9 days
E) 70.9 days
66) On average, D & M sells its inventory in 37 days, collects on its receivables in 3.4 days, and
takes 35 days to pay for its purchases. What is the length of the firm's operating cycle?
A) −1.4 days
B) 5.4 days
C) 33.6 days
D) 40.4 days
E) 41.6 days
67) Jordan and Sons has an inventory period of 48.6 days, an accounts payable period of 36.2
days, and an accounts receivable period of 29.3 days. Management is considering offering a
discount of 5 percent if its credit customers pay for their purchases within 10 days. This discount
is expected to reduce the receivables period by 17 days. If the discount is offered, the operating
cycle will decrease from ________ days to ________ days.
A) 28.3; 11.3
B) 77.9; 60.9
C) 28.3; 45.3
D) 77.9; 94.9
E) 54.2; 37.2
68) Wilson's has an inventory turnover rate of 16, an accounts payable period of 47 days, and an
accounts receivable period of 37 days. What is the length of the cash cycle?
A) 32.81 days
B) −6.00 days
C) 2.00 days
D) 6.00 days
E) 12.81 days
69) Salem Inc. has an inventory turnover of 15 and an accounts receivable turnover of 9. The
accounts payable period is 51 days. What is the length of the cash cycle?
A) 13.89 days
B) 14.07 days
C) 14.23 days
D) 18.79 days
E) 23.00 days
70) A firm currently has a cash cycle of 36 days. Assume the firm changes its operations such
that it decreases its receivables period by 4 days, decreases its inventory period by 1 day, and
decreases its payables period by 2 days. What will be the length of the cash cycle after these
changes?
A) 31 days
B) 35 days
C) 33 days
D) 37 days
E) 38 days
71) Wilco's currently has a cash cycle of 43 days. Assume the firm changes its operations such
that it decreases its receivables period by 2 days, increases its inventory period by 1 day, and
increases its payables period by 3 days. What will be the length of the cash cycle after these
changes?
A) 38 days
B) 41 days
C) 39 days
D) 43 days
E) 45 days
72) The inventory turnover for the Lambkin Company was 9.4 times and its days' sales in
receivables was 46. What is the operating cycle given a 365-day year?
A) 45.63 days
B) 55.40 days
C) 63.25 days
D) 84.83 days
E) 74.29 days
73) Gonzalez Mercantile has an inventory turnover of 8.3, days' sales in receivables of 57, and an
average payables turnover of 7.2. What is the cash cycle given a 365-day year?
A) 50.28 days
B) 58.04 days
C) 55.00 days
D) 49.29 days
E) 61.37 days
74) For 2018, Blue Moon had sales of $318,000, cost of goods sold of $249,000, and ending
inventory of $138,000. For 2019, sales were $349,000, cost of goods sold were $256,000, and
ending inventory was $151,000. What was the inventory period for 2019?
A) 194.01 days
B) 216.99 days
C) 231.09 days
D) 206.03 days
E) 189.42 days
75) For 2018, Tree Top Farms had sales of $438,000, cost of goods sold of $286,000, ending
inventory of $154,000, ending accounts receivable of $46,000, and ending accounts payable of
$38,000. For 2019, sales were $413,000, cost of goods sold was $281,000, ending inventory was
$149,000, ending accounts receivables were $48,000, and ending accounts payable were
$36,000. What was the cash cycle for 2019 based on a 365-day year?
A) 202.96
B) 190.27
C) 203.17
D) 185.87
E) 186.05
76) Alpha Companies has an operating cycle of 328 days, a receivables period of 64 days, and a
payables period of 98 days. If the firm revises its credit policy, it believes it can reduce its
receivables period by 9 days. Given this revision, what will be the firm's new cash cycle?
A) 239 days
B) 241 days
C) 230 days
D) 221 days
E) 218 days
77) Martinique's has a collection period of 60 days. Sales for the next calendar year are estimated
at $1,550, $1,230, $1,780 and $2,800, respectively, by quarter starting with the first quarter of
the year. Given this information, which one of the following statements is correct? Assume a
360-day year.
A) The firm will collect $1,133.33 in Quarter 2.
B) The accounts receivable balance at the beginning of Quarter 4 will be $1,066.67.
C) The firm will collect $593.33 from Quarter 2 sales in Quarter 3.
D) The firm will have an accounts receivable balance of $1,866.67 at the end of the year.
E) The firm will collect a total of $1,033.33 in Quarter 4.
78) Dixon's has a beginning receivables balance on January 1st of $930. Sales for January
through April are $970, $1,050, $1,330, and $1,460, respectively. The accounts receivable period
is 36 days. How much did the firm collect in the month of March? Assume a 30-day month.
A) $1,034
B) $1,316
C) $1,289
D) $1,350
E) $1,180
79) Smith and Johnson have expected sales of $2,380, $2,840, $4,430, and $4,480 for the months
of January through April, respectively. The accounts receivable period is 15 days. How much did
the firm collect in the month of March? Assume a 30-day month.
A) $2,215
B) $4,160
C) $3,635
D) $3,430
E) $1,420
80) Orio Inc. has a beginning receivables balance on January 1st of $685. Sales for January
through April are $735, $690, $770, and $850, respectively. The accounts receivable period is 30
days. How much did the firm collect in the month of April? Assume a 30-day month.
A) $735
B) $690
C) $730
D) $810
E) $770
