Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Question
Chapter 5, Problem 5.2.2MBA
To determine
Concept Introduction:
Cash Flow statement:
The Cash flow statement shows the movement of cash during a particular period. The
- Cash flows from operating activities
- Cash Flows from investing activities
- Cash flows from financing activities
(Note: Cash flows from operating activities can be prepared using direct or indirect method)
To Calculate:
The ratio of cash to monthly cash expense
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Assume selected financial data for Sun Health Group and Select Medical Corporation, two companies in the health-care industry, are as follows:
($ in millions)
Net Sales
Beginning AccountsReceivable
Ending AccountsReceivable
Sun Health
$1,930
$215
$202
Select Medical
2,240
414
353
Required: 1. Calculate the receivables turnover ratio and average collection period for Sun Health and Select Medical. Round your answers to one decimal place. Compare your calculations with those for Tenet Healthcare and LifePoint Hospitals reported in the chapter text. Which of the four companies maintains a higher receivables turnover? 2. How does the receivables turnover ratio reflect the efficiency of management? Discuss factors that affect the receivables turnover ratio.
Given the following information, complete the balance sheet shown next
Collection period
Days' sales in cash
Current ratio
Assets
Current assets:
Cash
Inventory turnover
Liabilities to assets
Payables period
(All sales are on credit. All calculations assume a 365-day year. The payat
Note: Round your answers to the nearest whole dollar.
Accounts receivable
Inventory
Total current assets
Net fixed assets
Total assets
Liabilities and shareholders equity
Current liabilities:
Accounts payable
Short-term debt
Total current liabilities
70 days
32
days
2.2
5
70%
36 days
Long-term debt
Shareholders equity
Total liabilities and equity
times
$ 1,300,000
S
S
1,900,000
8,000,000
2.400.000
8.000.000
diagnostic devices for eye disease. TearLab reported the following data (in thousands) for three recent years:
Determine the monthly cash expenses for Year 3, Year 2, and Year 1. Round to one decimal place.
Determine the ratio of cash to monthly cash expenses as of December 31 for Year 3, Year 2, and Year 1. Round to one decimal place.
Based on (1) and (2), comment on TearLab's ratio of cash to monthly operating expenses for Year 3, Year 2, and Year 1.
Chapter 5 Solutions
Survey of Accounting (Accounting I)
Ch. 5 - Prob. 1SEQCh. 5 - Prob. 2SEQCh. 5 - Prob. 3SEQCh. 5 - Adjustments to the company’s records based on the...Ch. 5 - Prob. 5SEQCh. 5 - Prob. 1CDQCh. 5 - Prob. 2CDQCh. 5 - Prob. 3CDQCh. 5 - Prob. 4CDQCh. 5 - Prob. 5CDQ
Ch. 5 - Prob. 6CDQCh. 5 - Prob. 7CDQCh. 5 - Prob. 8CDQCh. 5 - Prob. 9CDQCh. 5 - Assume that Leslie Hunter, accounts payable clerk...Ch. 5 - Prob. 11CDQCh. 5 - The accounting clerk pays all obligations by...Ch. 5 - Prob. 13CDQCh. 5 - Prob. 14CDQCh. 5 - Do items reported as a credit memorandum on the...Ch. 5 - Prob. 16CDQCh. 5 - Prob. 17CDQCh. 5 - Prob. 5.1ECh. 5 - Prob. 5.2ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Prob. 5.5ECh. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17ECh. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Entries for note collected by bank Accompanying a...Ch. 5 - Prob. 5.21ECh. 5 - Prob. 5.22ECh. 5 - Prob. 5.23ECh. 5 - Prob. 5.24ECh. 5 - Prob. 5.25ECh. 5 - Prob. 5.1PCh. 5 - Prob. 5.2.1PCh. 5 - Prob. 5.2.2PCh. 5 - Prob. 5.3.1PCh. 5 - Prob. 5.3.2PCh. 5 - Prob. 5.4.1PCh. 5 - Prob. 5.4.2PCh. 5 - Prob. 5.4.3PCh. 5 - Prob. 5.4.4PCh. 5 - Prob. 5.1.1MBACh. 5 - Prob. 5.1.2MBACh. 5 - Prob. 5.1.3MBACh. 5 - Prob. 5.1.4MBACh. 5 - Ratio of cash to monthly cash expenses AcelRx...Ch. 5 - Prob. 5.2.1MBACh. 5 - Prob. 5.2.2MBACh. 5 - Ratio of cash to monthly cash expenses Pacira...Ch. 5 - Ratio of cash to monthly cash expenses Pacira...Ch. 5 - Prob. 5.2.5MBACh. 5 - Prob. 5.3.1MBACh. 5 - Prob. 5.3.2MBACh. 5 - Prob. 5.3.3MBACh. 5 - Prob. 5.3.4MBACh. 5 - Prob. 5.3.5MBACh. 5 - Prob. 5.4.1MBACh. 5 - Prob. 5.4.2MBACh. 5 - Prob. 5.1CCh. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5.1CCh. 5 - Prob. 5.5.2CCh. 5 - Prob. 5.5.3CCh. 5 - Prob. 5.6C
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- Ratio of cash to monthly cash expenses Pacira Pharmaceuticals Inc. (PCRX) Develops, produces, and sells products used in hospitals and surgery centers. The following data (in thousands) were adapted from recent financial statements. Including short-term investments as part of cash and cash equivalents, compute the ratio of cash to monthly cash expenses for Years 1 and 2. Round to one decimal place.arrow_forwardRatio of cash to monthly cash expenses Pacira Pharmaceuticals Inc. (PCRX) Develops, produces, and sells products used in hospitals and surgery centers. The following data (in thousands) were adapted from recent financial statements. Comment on the results from parts (2) and (3).arrow_forwardFinancial data for Otto Company follow: a. Compute the ratio of cash to monthly cash expenses. b. Interpret the results computed in (a).arrow_forward
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