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- Financial data for Otto Company follow: a. Compute the ratio of cash to monthly cash expenses. b. Interpret the results computed in (a).Which of the following options indicate how quickly accounts receivables are converted into cash? Select one: a. Total assets turnover b. Days to collect accounts receivable c. Working capital d. Accounts receivable turnoverWhich is an appropriate method of preparing a common-size cash fl ow statement? B . Show each line item on the cash fl ow statement as a percentage of net revenue.
- Which of the following is a method to generate cash from accounts receivable?a. Assignmentb. Factoringc. Assignment and factoringd. Assignment, factoring and discountingUsing examples from the income statement distinguish between cash outflows and cash inflows. Please provide two examples for each cash flow.(1) During Year 1, Hardy Merchandising Company purchased $15,000 of inventory on account. (2) Hardy sold inventory on account that cost $11,300 for $16,900. (3) Cash payments on accounts payable were $9,400. (4) There was $15,000 cash collected from accounts receivable. (5) Hardy also paid $3,500 cash for operating expenses. Assume that Hardy started the accounting period with $24,500 in both cash and common stock. Required: a. Identify the events described in the preceding paragraph and record them in a horizontal statements model like the following one. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA), b. What is the balance of accounts receivable at the end of Year 1? c. What is the balance of accounts payable at the end of Year 1? d. What are the amounts of gross margin and net income for Year 1? e. Determine the amount of net cash flow from operating activities. Complete this…
- Total cash inflow in the operating section of the statementof cash flows should include which of the following?a. Cash received from customers at the point of sale.b. Cash collections from customer accounts receivable.c. Cash received in advance of revenue recognition(unearned revenue).d. All of the above.A company’s profi tability for a period would best be evaluated using the:C . statement of cash fl ows.. Which one of the following defines the cash cycle? A. Inventory period plus the accounts receivable period B. Inventory period plus the accounts payable period C. Operating cycle minus the inventory period D. Operating cycle minus the accounts payable period E. Operating cycle minus the accounts receivable period
- The measure of a company’s ability to collect cash from its customers who purchase onaccount is thea. accounts payable turnover.b. cash conversion cycle.c. accounts receivable turnover.d. days’ payable outstanding.Where are cash equivalents disclosed in the financial statements?The _____________ account on the balance sheet. A.) Accounts Recievable B.) Cash C.) Expenses D.) Merchandise Inventory E.) SalesWhich of the following is a means of using receivables to obtain immediate cash? a. Factoring b. Pledging c. Assignment d. All of the above
