Using the Information Provided,what Is the Collection Cycle for the Firm

question 87

Multiple Choice

Using the information provided,what is the collection cycle for the firm? Allied Industries, Inc.
Selected Income Statement Items, 2017
$\begin{array}{ll}\text { Cash Sales } & \$ 1,500,000 \\\text { Credit Sales } & \$ 7,500,000 \\\text { Total Sales } & \$ 9,000,000 \\\text { COGS } & \$ 6,000,000\end{array}$
Allied Industries, Inc.
Selected Balance Sheet Accounts
$\begin{array}{llll}&12/31/2017 &12/31/2016&\text { Change }\\\text { Accounts Receivable } & \$ 270,000 & \$ 240,000 & \$ 30,000 \\\text { Inventory } & \$ 125,000 & \$ 100,000 & \$ 25,000 \\\text { Accounts Payable } & \$ 110,000 & \$ 90,000 & \$ 20,000\end{array}$

• A)6.84 days
• B)7.60 days
• C)10.34 days
• D)12.41 days

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Definitions:

Three-strip Technicolor

Three-strip Technicolor is a color film process that uses three strips of film to capture the red, green, and blue color components, introduced in the 1930s to create vivid color movies.

Sound Cinema Technology

The technology enabling the synchronization of motion picture with sound, revolutionizing the film industry in the late 1920s.

Phonograph

An early sound-reproducing machine that uses cylinders or discs to record and playback sound, invented in the late 19th century.

Vitaphone

An early sound film system created by Warner Bros. that synchronized a film's soundtrack stored on phonograph records.