Calculate the Value of Accounts Receivable, Given the Following Information

question 87

Multiple Choice

Calculate the value of Accounts Receivable, given the following information: $$\begin{array} { | l | c | } \hline \text { Data: } & \\\hline \text { Average Inventory } & 7,000.00 \\\hline \text { Average AR } & ? \\\hline \text { Average AP } & 3,500.00 \\\hline \text { Sales } & 120,000.00 \\\hline \text { COGS } & 95,000.00 \\\hline \text { Cash Conversion Cycle } & 51.47 \\\hline \text { Inventory Period } & 26.89 \\\hline \text { Payables Period } & 13.45 \\\hline\end{array}$$

• A)$10,500
• B)$11,500
• C)$12,500
• D)$13,500

Understand the principles of accounting for contingent liabilities and how they are reported.

Recognize the correct treatment of employee benefits and taxes in financial statements.

Understand the concept of working capital and its importance for short-term liquidity.

Grasp the principles of accounting for leases and long-term assets, including the use of present value concepts.

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Definitions:

Deferred Tax Liability

This is a tax obligation that a company owes but can pay at a future date due to timing differences between its financial accounting and tax filing.

Deferred Tax Asset

An accounting asset representing the amount of taxes payable in future periods due to deductible temporary differences and carryforwards.

Capital Cost Allowance

A tax deduction in some tax systems for businesses, representing depreciation on capital assets.

Straight-Line Depreciation

A procedure for distributing the expense of a physical asset equally over its operational lifetime on an annual basis.