Mandesa, Inc., has current liabilities of $10,000,000, current ratio of 1.8 time

Question

Mandesa, Inc., has current liabilities of $10,000,000, current ratio of 1.8 times, inventory turnover of 10 times, average collection period of 30 days, and credit sales of $63,999,990.

Calculate the value of cash and marketable securities. (Use 365 days a year. Round your intermediate calculations and final answer to the nearest dollar amount.)

Mandesa, Inc., has current liabilities of $10,000,000, current ratio of 1.8 times, inventory turnover of 10 times, average collection period of 30 days, and credit sales of $63,999,990.

Explanation / Answer

Current assets = $ 18,000,000

Inventory TO = $63,999,990 / Inventory

Inventory = $6,399,999

Average collection period = Account rec * 365 / Credit sale

30 Days = 365* AR/ $63,999,990

AR= $ 5260273.15

Cash and marketable securities = CA - AR- Inventory

= $ 18,000,000 - $ 5260273.15 - $6,399,999

= $ 6,339,727.85

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.