1. Houston Corporation has an inventory conversion period of 60days (DII), a receivables collection period of 36 days (DSO), and apayable deferral period of 24 days (DPO). a. What is the length ofthe company’s cash conversion cycle? b. If Houston’s annual salesare $3,960,000 and all sales are on credit, what is the averagebalance in accounts receivable? c. How many times per year doesHouston turn over its inventory? (week 5) d. What would happen toHouston’s cash conversion cycle if, on average, inventories couldbe turned over eight times a year? 2. Webber Corporation carries anamount of receivables equal to $80,000, and its annual credit salesequal $2.4 million. What is the receivables collection period(DSO)? 3. Cleary Enterprises owes its suppliers $180,000. Thecompany’s cost of goods sold averages $2.52 million. What isCleary’s payables deferral period (DPO)? 4. Willowman FurnitureCompany has inventory that equals $48 million. If the inventoryturnover for the company is 8, what is the inventory conversionperiod and cost of goods sold?

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Sixta Kovacek
Sixta KovacekLv2
28 Sep 2019

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