Sat 11:40 PM Help cory Bookmarks Window v2.cengagenow.com Calculator Print Item Show Me How eBook Accounts Receivable Analysis The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Υ1 20Υ2 20Υ3 $600,000 $650,000 $725,000 Accounts receivable, end of year 4,687,500 5,637,500 Sales on account a. For 20Y2 and 20Y3, determine (1) the accounts receiva ble turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Υ2 20Υ3 1. Accounts receivable turnover days days 2. Number of days' sales in receivables < b. The collection of accounts receivable has improved in accounts receivable turnover and the . This can be seen in both the increase in the collection period. decrease Feedback Check My Work a.1. Divide net sales by average accounts receivable. Average Accounts receivable (Beginning Accounts Receivable + Ending Accounts Receivable) + 2. a.2. Divide average accounts receivable by average daily sales on account. Average ACCounts receivable = (Beginning Accounts Receivable + Ending Accounts Receivable)+ 2. Average daily sales on account Net Sales+365 days. b.Consider the relationship of the accounts involved. Consider the effects of the changes on the business. Check My Work Previous Next

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 14.4BE: Accounts receivable analysis A company reports the following: Sales 3,150,000 Average accounts...

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Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford Co., 24,000. The cost of the merchandise sold was 14,400. 13. Sold merchandise on account to Dry Creek Co., 60,000. The cost of merchandise sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account to Halloran Co., 13,500. The cost of the merchandise sold was 8,100. 15. Received from Halloran Co. the amount of the invoice of October 5. Instructions Journalize the entries to record the transactions.
Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8 % note. Feb. 10. Sold merchandise on account to Bradford Co., 24, 000. The cost of the merchandise sold was 14,400. 13. Sold merchandise on account to Dry Creek Co., 60,000. The cost of merchandise sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5.Sold merchandise on account to Halloran Co. 13,500. The cost of the merchandise sold was 8, 100. 15 Received from Halloran Co. the amount of the invoice of October 5, less 2 % discount. Instructions Journalize the entries to record the transactions.
Allowance method Using transactions listed in £6-S. indicate the effects of each transaction on the liquidity metric days’ sales in receivables and profiability metric return on sales.

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