(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity through ratios) Geneva Co., Inc., an electronics and appliance chain,reported these figures in millions of dollars:Net sales .........................................Receivables at end of year...............2019$523,1253,8602018$543,1254,510Requirements1. Compute Geneva’s days’ sales in receivables or days’ sales outstanding (DSO) during2019. (For this exercise, use “net sales” for “net credit sales” when calculating ratios.)2. Is Geneva’s DSO long or short? Kurzwel Networks takes 39 days to collect its averagelevel of receivables. Domarko Freight, the overnight shipper, takes 33 days. What causesGeneva’s collection period to be so different?

Question

(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;
evaluate liquidity through ratios) Geneva Co., Inc., an electronics and appliance chain,
reported these figures in millions of dollars:
Net sales .........................................
Receivables at end of year...............
2019
$523,125
3,860
2018
$543,125
4,510
Requirements
1. Compute Geneva’s days’ sales in receivables or days’ sales outstanding (DSO) during
2019. (For this exercise, use “net sales” for “net credit sales” when calculating ratios.)
2. Is Geneva’s DSO long or short? Kurzwel Networks takes 39 days to collect its average
level of receivables. Domarko Freight, the overnight shipper, takes 33 days. What causes
Geneva’s collection period to be so different?

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Accounting theory

Accounting Ratio Analysis

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: On January 1, 2015, Buchheit Enterprises reported $95,000 in a liability called “Bonds Payable,Net.”...

A: We have the following information:  Reported $95,000 as Bonds Payable in Liability section of balan...

Q: What information would you expect to find in a current audit file?

A: Audit: Audit is the process of verification of the compliance of the financial statements.

Q: Fundamental Principles (Comprehensive). In each of the following, identify which ofthe elements of t...

A: a) Responsibility Principle: It is the duty of an auditor to make appropriate competence and capabil...

Q: A corporation has 100,000 shares of 4% preferred stock outstanding. Also, thereare 100,000 shares of...

A: Given information is: A corporation has 100,000 shares of 4% preferred stock outstanding. Also, ther...

Q: Riverbed Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The g...

A: Click to see the answer

Q: Dwight’s Trophy Shop is considering the following accounting changes:a. Increase the allowance for u...

A: Click to see the answer

Q: Income statement and balance sheet data for Virtual Gaming Systems are provided below.Required: 1. C...

A: Risk ratios are calculated based on the company's ability to pay back the current and long -term lia...

Q: Bryer Co. purchases all of the assets and liabilities of Stellar Co. for $1,500,000. The fair value ...

A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired compan...

Q: In 2013, Macy’s reported cost of goods sold of $16.5 billion, ending inventory for 2013 of$5.3 billi...

A: cost of shrinkage = ending inventory for 2013 had there been no shrinkage - actual ending inventory ...

Q: Biloxi Gifts uses sales journal, purchases journal, cash receipts journal, cash payments journal, an...

A: Given: Purchase of merchandise on credit = $ 2,600 Contribution to automobile = $ 17000 Sold merchan...

Q: For each separate situation, indicate whether Cruz Company should (a) record a liability, (b) disclo...

A: 1.  

Q: At December 31, the unadjusted trial balance of H&R Tacks reports Unearned Revenue of$5,000 and ...

A: Adjusting entries: Adjusting entries are also known as adjusting journal entries, they are recorded ...

Q: Sprague Company uses the aging method to adjust the allowance for uncollectibleaccounts at the end o...

A: The aging method alludes to the technique for assessing the measure of an organization's records rec...

Q: Explain why cash outflows during the period for purchasesand salaries are not specifically reported ...

A: Cash flow statements are the statements that determine the inflow and outflow of cash from three maj...

Q: BSO, Inc. has current assets of $1,000,000 and current liabilities of $500,000, resulting in a curre...

A: b.  

Q: Which course is most like financial accounting?a. College algebra.b. Foreign language.c. Molecular b...

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting a...

Q: What is the concept behind separation of duties in establishing internal control? a. Employee fraud ...

A: Answer:   Option a

Q: As of December 31, 2019, Armani Company’s financial records show the following items and amounts.Cas...

A: Net Income = Revenues - expenses

Q: Jenny has learned that assets have debit balances, while liabilities have credit balances. Based on ...

A: Given situation is: Jenny has learned that assets have debit balances, while liabilities have credit...

Q: Below are typical transactions for Caterpillar Inc.Type of Business Activity                        ...

A: Statement of cash flows: Cash flow statement is also known as statement of cash flows. It is a finan...

Q: After fieldwork audit procedures are completed, a partner of the CPA firm who has not been involved ...

A: As per Standard of Auditing the main focuses of Second Review is Confirmation of Financial Statemen...

Q: Ace Company purchases $1,400 of merchandise from Zitco on December 16. Zitco accepts Ace’s $1,400, 9...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 60,000 shar...

A: Calculation of Basic EPS:

Q: Buzzard Bicycle specializes in custom painting and design of bicycles. December 31 is the company’s ...

A: A modifying journal entry is a passage in an organization's overall record that happens toward the f...

Q: Recorded cash from cash clients for fees earned for the period january 17-24, RM1,850

A: Given transaction is: Cash received from cash clients for fees earned for the period january 17-24, ...

Q: How does the audit team determine expected misstatement? What is the relationship betweenexpected mi...

A: Expected misstatement The amount of misstatement the audit team anticipated in the account balance o...

Q: In August, Joplin Designs sold $510,000 of merchandise; all sales were in cash.The cost of sales for...

A: Record the journal entries for the monthly sales, cost of sales:

Q: Spielberg Company’s general ledger shows a checking account balance of $22,970 on July 31, 2021. The...

A: Bank Reconciliation Statement is a statement prepared to reconcile the difference between the balanc...

Q: The problem gives me total costs for materials and labor. Can you tell me the cost per materials and...

A: Since the student has specifically asked for cost of material and labour per unit to be calculated, ...

Q: Attached below is my homework question and the Bartleby Answer. I don't understand why the answer is...

A: Cash flow from operating activities =$  50,000   Net Income = $ 115,000

Q: On January 2, 2020, Ayayai Company purchases a call option for $310 on Merchant common stock. The ca...

A: Journal entries are recording of the transaction in the accounting journal in a chronological order....

Q: New Morning Bakery is in the process of closing its operations. It sold its two-year-old bakery oven...

A: Straight line depreciation is a typical technique for depreciation where the estimation of fixed ass...

Q: Prepare journal entries to record the following merchandising transactions of Lowe’s, which uses the...

A: Click to see the answer

Q: What data flows from the statement of retained earnings to the balance sheet?a. Net incomeb. Cashc. ...

A: Retained earnings: Retained earnings are the portion of earnings kept by the business for the purpos...

Q: Identify which of the following items are not included as part of general-purpose financial statemen...

A: Financial statements: These are financial reports that helps management in assessing the company's c...

Q: Identify the following users of accounting information as either an (a) external or (b) internal use...

A: External users of accounting information are those persons which are external to the organisation an...

Q: How are the substantive procedures performed by the audit team related to the objective of MUS?

A:  

Q: Classify the following activities as part of the identifying (I), recording (R), or communicating (C...

A: Click to see the answer

Q: A company has a profit margin of 10% and reports net sales of $4,000,000 and average total assets of...

A: Return on assets = Net income / Average total assets where, Average total assets = (Beginning total ...