Selected Financial Statement Data for Oran Company Are Presented Below

question 88

Essay

Selected financial statement data for Oran Company are presented below.
During 2014,net sales were $950,000,and cost of goods sold was $775,000.
a.Compute the following ratios at December 31,2014:
1 Current
2 Acid-test
3 Average collection period
4 Average days to sell inventory
b.Assume credit terms are 2/10,net 30.What conclusion could an analyst draw about the management of accounts receivable?

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of another entity without controlling it.

Carrying Amount

The value of an asset as shown in the business’s accounts, reflecting its cost minus any depreciation or impairment charges.

Gain or Loss

The financial result that occurs when the selling price of an asset differs from its book value.