Solution-What is the discount being offered by the supplier

What is the discount being offered by the supplier

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Reference no: EM133069018

The following data available for UFO Deli Ltd.

Account	Beginning balance	Ending Balance	Use/source of cash
Accounts payable	27,400	25,500
Inventory	62,600	67,700
Long term debts	125,500	95,600
Common stock	220,400	245,500

Other information:

The company just placed an order for 700 kg of chicken drumsticks at a unit price of $3/kg. The supplier offers credit terms of 2/15, net 45.
Beginning balance of accounts receivable is $27,500. Ending balance of accounts receivable of $26,800
Total revenue (all sales are on credit) is $287,500
Total cost of goods sold is $195,000

Required:

1. What is the discount being offered by the supplier to UFO Deli Ltd. ? How quickly must the company pay to get the discount? If the company takes the discount, how much should they pay?

2. Calculate and identify the source of cash or the use of cash for each account by filling into the column next to the ending balance

Calculate the operating cycle and interpret the outcome

Reference no: EM133069018

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What is the discount being offered by the supplier

Reference no: EM133069018

Reference no: EM133069018

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