a) Canadian Bacon Inc. financial statements are presented in the table below. Ba
ID: 2655444 • Letter: A
Question
a) Canadian Bacon Inc. financial statements are presented in the table below.
Based on the information in the table, and using a 365-day year, calculate Average Day’s Purchases.
Round the answers to two decimal places
Balance Sheet December 31, 2013
Income Statement, Year of 2013
Cash and marketable securities $112,000 Accounts payable $211,000 Accounts receivable $325,000 Notes payable $51,500 Inventories $426,000 Accrued expenses $50,100 Prepaid expenses $10,700 Total current liabilities $312,600 Total current assets $873,700 Long-term debt $225,000 Gross fixed assets $1,514,000 Par value and paid-in-capital $117,000 Less: accumulated depreciation $315,000 Retained Earnings $1,418,100 Net fixed assets $1,199,000 Common Equity 1,535,100 Total assets $2,072,700 Total liabilities and owner’s equity $2,072,700Explanation / Answer
Answer:
Average payable ratio =Net credit purchase /Accounts payable
=($2,572,714.00-$426000)/($211,000+$51500)
=2146714/262500
=8.18 times
Average day purchase =365 days/Average payable ratio
=365/8.18
=44.62 days
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