Use the Selected Data from Pinecrest Company's Financial Statements to Answer

question 116

Multiple Choice

Use the selected data from Pinecrest Company's financial statements to answer the following question. $$\begin{array} { l r r } & \underline { 2017 } & \underline { 2016 } \\\text { Cash } & \$ 22,000 & \$ 14,000 \\\text { Accounts receivable } & 42,000 & 16,000 \\\text { Merchandise inventory } & 22,000 & 83,000 \\\text { Prepaid expenses }& \underline { 23,000 } & \underline { 18,000 } \\\text { Total current assets } & \underline { \mathbf { \$ 1 0 9 , 0 0 0 } } & \underline { \mathbf { \$ 1 3 1 , 0 0 0 } } \\\\\text { Total current liabilities } & \$ 65,000 & \$ 72,000 \\\text { Net credit sales } & 221,000 & 326,000 \\\text { Cost of goods sold } & 168,000 & 299,000 \\\text { Net cash flow from operating activities } & 16,000 & 29,000\end{array}$$ ​
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-Refer to the data for Pinecrest Company. ?
Competitors in Pinecrest Company's industry have an average accounts receivable turnover of 10.8 times.Pinecrest reported accounts receivable at December 31, 2017, of $42,000 and has normal credit terms requiring payment within 30 days.Pinecrest's accounts receivable turnover for 2017 is:?

• A) probably indicating that the company probably has stricter credit terms and policies than the industry as a whole, which may repel potential buyers.
• B) of no value to bankers and other creditors.
• C) less efficient in its collection policies in 2017 than the industry as a whole.
• D) less than the industry, which means that its customers are paying on their accounts in a more timely manner than are customers reflected by the industry average.

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Definitions:

Group Size

Refers to the number of individuals constituting a social or work group, affecting dynamics and interactions within.

Distortion of Judgment

refers to the impairment or alteration of an individual's ability to make clear, rational decisions or assessments due to various influences.

Group

A collection of individuals who come together for a common purpose or to achieve a shared goal.

Coaction Effect

is a phenomenon observed in social psychology where the presence of others engaged in the same task can influence an individual's performance.