A. What is the operating cycle for White Bluffs, Inc. if all sales are on credit?
B. If you knew that Accounts Receivables were $3,250 the prior year, what effect would this have on your estimate of the operating cycle. Show and explain why.
A. Inventory Turnover = CGS/Inventory = 28461/7280 = 3.909.
Days in Inventory = 365/3.909 = 93.37 days.
Accounts Receivable Turnover = Sales/A/R = 44,466/3779 = 11.767.
Days in Receivables = 365/11.767 = 31.02.
Operating Cycle = Days in Inventory + Days in Receivable = 93.37 + 31.02 = 124.39.
B. Average Accounts Receivable = 3779 + 3250/2 = 3514.50
A/R Turnover = 44,466/3514.50 = 12.652.
Days in Receivables = 365/12.652 = 28.85.
Operating Cycle = 93.37 + 28.85 = 122.22.
- Operating Cycle falls because of a smaller average tied up in receivables to generate sales.

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The Answer of A. What is the operating cycle for White Bluffs, Inc. if all sales are on credit?
B. If you knew that Accounts Receivables were $3,250 the prior year, what effect would this have on your estimate of the operating cycle. Show and explain why.
A. Inventory Turnover = CGS/Inventory = 28461/7280 = 3.909.
Days in Inventory = 365/3.909 = 93.37 days.
Accounts Receivable Turnover = Sales/A/R = 44,466/3779 = 11.767.
Days in Receivables = 365/11.767 = 31.02.
Operating Cycle = Days in Inventory + Days in Receivable = 93.37 + 31.02 = 124.39.
B. Average Accounts Receivable = 3779 + 3250/2 = 3514.50
A/R Turnover = 44,466/3514.50 = 12.652.
Days in Receivables = 365/12.652 = 28.85.
Operating Cycle = 93.37 + 28.85 = 122.22.
- Operating Cycle falls because of a smaller average tied up in receivables to generate sales.

A What Is the Operating Cycle for White Bluffs, Inc