Page 4 of 11 Question 3
X Ltd is a holding company. Senior management wishes to compare the performance of
the two subsidiaries of M Lid: Y Ltd ("Y) and Z Ltd (Z"), which operate in a similar industry.
Extracts from the financial statements of Y and Z for the year ended 31 December 2019
are as follows:
Revenue
767.000
593,000
Cost of sales
568,000
377.000
Current assets
Inventory
122.000
97,000
Trade receivables
124.000
136.000
Bank
6,000
8,000
Current liabilities
Trade payables
107.000
130,000
Note: all revenues are credit sales.
Required:
As financial controller, prepare a memorandum for the holding company's managing
director, which should include the following:
(a)
Estimate the cash conversion cycle for both Y and Z using the details provided
above and compare the results. Assume a 360-day year.
(10 marks)
(b)
a list of key recommendations for improvements in the working capital
management of each company based on your results from part (a). (4 marks)
(c)
a discussion of the objectives of working capital management and two sources of
short-term financing that would be suitable for the financing of working capital.
(6 marks)
(d)
a discussion of key steps the company should follow for the management of trade
receivables.
(5 marks)
[Total: 25 marks]
Page 5 of 11

Why does the united states government provide tax breaks related to the amount of money companies spend on research and development? a. to provide incentives for companies to conduct research and development to allow antitrust authorities b. to challenge joint research efforts c. to protect the right of inventors d. to produce and sell their inventions e. to involve less government scrutiny than a government funded project

Which of the following would classify as a general education requirement

Alpha company uses the periodic inventory system for purchase & sales of merchandise. discount terms for both purchases & sales are, 2/10, n30 and the gross method is used. unless otherwise noted, fob destination will apply to all purchases & sales. the value of inventory is based on periodic system. on january 1, 2016, beginning inventory consisted of 350 units of widgets costing $10 each. alpha prepares monthly income statements. the following events occurred during the month of jan.: dateactivitya.jan. 3purchased on account 350 widgets for $11 each.b.jan. 5sold on account 400 widgets for $30 each. paid freight out with petty cash of $150.c.jan. 10purchased on account 625 widgets for $12 each.d.jan. 11shipping cost for the january 10 purchased merchandise was $400 was paid with a cheque by alpha directly to the freight company.e.jan. 12returned 50 widgets received from jan. 10 purchase as they were not the correct item ordered.f.jan. 13paid for the purchases made on jan. 3.g.jan. 21sold on account 550 widgets for $30 each. paid freight out with petty cash of $250.h.jan. 22authorize credit without return of goods for 50 widgets sold on jan. 21 when customer advised that they were received in defective condition.i.jan. 25received payment for the sale made on jan. 5.j.jan. 26paid for the purchases made on jan. 10.k.jan. 31received payment for the sale made on jan. 21.use this information to prepare the general journal entries (without explanation) for the january events. if no entry is required then enter the date and write "no entry required."