Mathis Incorporated and Hashey Companies are two of the largest and most successful toymakers in the world, in terms of theproducts they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider thefollowing information reported in their annual reports (amounts in millions).Fiscal Year Ended:Net SalesAccounts ReceivableAllowance for Doubtful AccountsAccounts Receivable, Net of AllowanceRequired:Req 1Req 2A1. Calculate the receivables turnover ratios and days to collect for Mathis and Hashey for 2018 and 2017.TIP: In your calculations, use average Accounts Receivable, Net of Allowance.2-a. Which of the companies was quicker to convert its receivables into cash in 2018?2-b. Which of the companies was quicker to convert its receivables into cash in 2017?Complete this question by entering your answers in the tabs below.Req 2BReceivables Turnover RatioDays to Collect2018$ 5,6561,158211,137Mathis2018Mathis2017$ 5,1316.076424740HasheyCalculate the receivables turnover ratios and days to collect for Mathis and Hashey for 2018 and 2017.TIP: In your calculations, use average Accounts Receivable, Net of Allowance. (Use 365 days in a year. Do not roundintermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to 1 decimal place. Use finalrounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation.)< Req 12016$ 5,71889025865Mathis20176.42018$ 3,90298230952HasheyHashey2017$ 3,7681,062321,030Req 2A >2016$ 3,82263431603Show less ▲

The efficiency with which a firm is able to collect on its receivables or the credit it gives to…

Answered: Mathis Incorporated and Hashey…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 43P

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The following select financial statement information from Vortex Computing. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Vortex Computing if industry average for accounts receivable turnover ratio is 4 times and days sales in receivables ratio is 85 days?
Millennial Manufacturing has net credit sales for 2018 in the amount of $1,433,630, beginning accounts receivable balance of $585,900, and an ending accounts receivable balance of $621,450. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2018 (round answers to two decimal places). What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of days sales ratio is 180 days?
Last year, Tobys Hats had net sales of 45,000,000 and cost of goods sold of 29,000,000. Tobys had the following balances: Refer to the information for Tobys on the previous page. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.
Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Marbel had $4,448 million in sales and $1,218 million in ending accounts receivable for the current period. For the same period, Maxtel reported $5,703 million in sales and $1,145 million in ending accounts receivable. Calculate the days’ sales uncollected for both companies as of the end of the current period. Marbel Maxtel Which company is doing a better job in managing the collection of its receivables?
During the current year, Khan’s Camera Shop had sales revenue of $220,000, of which $100,800 was on credit. At the start of the current year, Accounts Receivable showed a $22,400 debit balance and the Allowance for Doubtful Accounts showed a $1,210 credit balance. Collections of accounts receivable during the current year amounted to $84,000. The Company uses the percentage of receivables method to account for its estimated uncollectible accounts. Data during the current year follow: a. On December 31, an Accounts Receivable from a deadbeat customer (Melania Trump, Wedding Photographer) of $2,800 from a prior year was determined to be uncollectible; therefore it was written off immediately as a bad debt. b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated uncollectible accounts on 3 percent of the end balance of accounts receivable. What is the Company’s bad debt expense for the year?
A company regularly sells its receivables to a factor who assesses a 2% service charge on the amount of receivables purchased. Which of the following statements is true for the seller of the receivables? The credit to Accounts Receivable is less than the debit to Cash when the accounts are sold. Selling expenses will increase each time accounts are sold. The other expense section of the income statement will increase each time accounts are sold. The loss section of the income statement will increase each time receivables are sold.
During the current year, Watanabe’s Camera Shop had sales revenue of $210,000, of which $86,400 was on credit. At the start of the current year, Accounts Receivable showed a $19,200 debit balance and the Allowance for Doubtful Accounts showed a $440 credit balance. Collections of accounts receivable during the current year amounted to $72,000. The Company uses the percentage of receivables method to account for its estimated uncollectible accounts. Data during the current year follow: a. On December 31, an Accounts Receivable from a deadbeat customer (Melania Trump, Wedding Photographer) of $3,400 from a prior year was determined to be uncollectible; therefore it was written off immediately as a bad debt. b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated uncollectible accounts on 2 percent of the end balance of accounts receivable. What is the Company’s bad debt expense for the year?
Cola Inc. and Soda Co. are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Cola Inc. Soda Co. Fiscal Year Ended: 2015 2014 2013 2015 2014 2013 Net Sales $ 31,219 $ 26,690 $ 27,944 $ 53,448 $ 39,232 $ 39,251 Accounts Receivable 4,398 3,733 3,061 6,387 4,634 3,704 Allowance for Doubtful Accounts 40 47 43 136 82 62 Accounts Receivable, Net of Allowance 4,358 3,686 3,018 6,251 4,552 3,642 Required: Calculate the receivables turnover ratios and days to collect for Cola Inc. and Soda Co. for 2015 and 2014. (Use 365 days in a year. Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round…
Company Abel has total sales of $364,500, of which, $60,500 represent cash sales. Its annual average accounts receivable balance is $74,400. Company Baker has total sales of $367,450, of which, $63,475 represent cash sales. Its annual average accounts receivable balance is $54,500. Which company has the favorable accounts receivable turnover experience?
Dongguk Industry began the accounting year of 2010 with accounts receivable balance of $650,000 and a balance in the allowance for doubtful accounts (bad debts) of $19,500. During 2010, credit sales totaled $7,290,000 and cash collected from customers totaled $7,500,000. Actual write-offs of specific accounts receivable in 2010 were $19,000, as this amount turned out to be finally uncollectible. At the end of the year, an accounts receivable analysis, using the percentage of accounts receivable method (aging method), indicated a required (desired) allowance for doubtful accounts balance of $12,600. No accounts receivable previously written off were collected. Required: 1. Provide relevant journal entries to record the transactions during 2010 (including credit sales, cash collection from customers, and write-off of uncollectible accounts receivable). 2. Provide an (adjusting) entry to record bad debt expense at the end of 2010. 3. What is the net realizable value(net book…
Stello Co. uses the percentage of credit sales method to determine its bad debt expense. All sales are made on credit. At the end of the current year, the company's net credit sales were $900,000, the balance in Accounts Receivable was $655,000, and the debit balance in Allowance for Doubtful Accounts was $800. Based on past experience, the company estimates 0.6% of net credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? a.$5,400 b.$1,775 c.$4,800 d.$1,275

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