Reference no: EM132658615
1) Pets Store Inc. sells on terms of 2/20, net 40. What is the effective annual cost of trade credit under these terms? Use a 365-day year.
Round the answer to two decimal places in percentage form. (write the percentage sign in the "units" box)
2) Post Card Depot, an large retailer of post cards, orders 3,964,575 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 19 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.30 per post card per year. The ordering cost is $332 per order.
What is the annual total inventory management costs of post card inventory?
(Round the answer to two decimal places).
3) Cheesburger and Taco Company purchases 7,647 boxes of cheese each year. It costs $28 to place and ship each order and $4.85 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders.
How many orders will be placed each year? Round the answer to the whole number
4) Canadian Bacon Inc. financial statements are presented in the table below.
Based on the information in the table, and using a 365-day year, calculate Average Day's Purchases.
Round the answers to two decimal places
Balance Sheet December 31, 2012
Cash and marketable securities $198,000 Accounts payable $288,000
Accounts receivable $469,000 Notes payable. $65,000
Inventories $577,000 Accrued expenses $84,000
Prepaid expenses. $15,700 Total current liabilities $437,000
Total current assets. $1,259,700 Long-term debt $237,000
Gross fixed assets. $1,954,000 Par value and paid-in-capital $199,000
Less: accumulated depreciation $476,000 Retained Earnings $1,864,700
Net fixed assets $1,478,000 Common Equity 2,063,700
Total assets $2,737,700 Total liabilities and owner's equity $2,737,700
Income Statement, Year of 2012
Net sales (all credit) $7,546,600.00
Less: Cost of goods sold $6,112,746.00
Selling and administrative expenses $349,000.00
Depreciation expense $145,000.00
EBIT $939,854.00
Interest expense $49,500.00
Earnings before taxes $890,354.00
Income taxes $356,141.60
Net income $534,212.40