Added monthly net income or loss under plan b

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Added Monthly Net Income or Loss under Plan B Increased sales .............................................................. $500,000 Cost of sales .................................................................. (375,000) Recordkeeping and shipping ($500,000 x 4%) ............. (20,000) Uncollectible accounts ($500,000 x 6.2%) .................... (31,000 ) Additional net income (loss) ......................................... $ 74,000 7-40
Chapter 7 - Accounting for Receivables Entrepreneurial Decision — BTN 7-7 continued 2. Plan (A) provides a slightly higher income, so if the company can only pursue one plan now, based purely on the financial aspect, it should choose Plan (A).
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Chapter 7 - Accounting for Receivables Global Decision — BTN 7-9 1. Accounts Receivable Turnover (EUR millions) Nokia (Current Year): €40,984 = 4.70 times (€7,981 + €9,444) / 2 2. Average Collection Period (or “Average Days’ Sales Uncollected”) Nokia (Current Year): 365 days / 4.70 times = 77.7 days 3. Nokia is more like Research In Motion than like Apple in terms of its turnover and collection periods. However, Nokia has a longer collection period than either of those competitors. Consequently, Nokia management might be well directed to focus on being more efficient with its receivables and lower its collection period. 4. EUR millions Total Receivables Percent of Total Current .................................... €7,302 91.5% Past due 1-30 days ................. 393 4.9% Past due 31-180 days ............. 170 2.1% More than 180 days ................ 116 1.5% Totals ...................................... €7,981 100.0% 7-42

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