FINAN.+MANAG.ACCT.-CONNECT ACCESS >C<
9th Edition
ISBN: 9781265610760
Author: Wild
Publisher: MCG CUSTOM
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Chapter 7, Problem 2.1AA
To determine
Concept Introduction: Receivable turnover measures the frequency with which a company converts its receivables into cash. The ratio is determined by dividing credit sales by average accounts receivable. Higher accounts receivable signify the quick collections of receivables.
The accounts receivable turnover for the two most recent years for Company A and Company G.
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A Financial Analysis Statement
Calculate the 2021 (year ended 12/31/21) current ratio for Twitter. Calculate the 2021 (year ended 12/31/2021) current ratio for Meta. Which company has a better current ratio and why? Explain in a short paragraph. Calculate the 2021 accounts receivable turnover ratio for Twitter. Calculate the 2021 accounts receivable turnover ratio for Meta. Calculate the average collection period for each company.
Show answer as number of days plus 2 decimals.
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Use the following financial statement information from Black Water Industries.
BLACK WATER INDUSTRIES
Ending Accounts
Receivable
Year
Net Credit Sales
2017
$690,430
$335,250
2018
705,290
364,450
2019
770,500
406,650
A. Compute the accounts receivable turnover ratios for 2018 and 2019. Round your
answers to two decimal places.
2018
times
2019
times
B. Using the accounts receivable turnover, choose the statement that most closely
describes the company's management of its receivables.
a. The company's lending policies may be too strict.
b. Collection efforts are not aggressive enough.
There may be uncollectable receivables affecting the beginning and ending
C.
balances.
d. All of the above statements may be correct.
a
b
d
Comparative figures for Apple and Google follow.
Apple
$ millions
Accounts receivable, net
Net sales
Current Year
$ 22,926
260,174
One Year
Prior
$ 23,186
265,595
Two Years
Prior
$ 17,874
229,234
Current Year
$ 25,326
161,857
Required:
Google
One Year
Prior
$ 20,838
136,819
Two Years
Prior
$ 18,336
110,855
1. Compute the accounts receivable turnover for the two most recent years for (a) Apple and (b) Google.
2. Which company more quickly collects its accounts receivable in the current year?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Compute the accounts receivable turnover for the two most recent years for (a) Apple and (b) Google.
Note: Round your answers to 1 decimal place.
Accounts Receivable Turnover
Current Year
Prior Year
a. Apple
b. Google
times
times
times
times
Chapter 7 Solutions
FINAN.+MANAG.ACCT.-CONNECT ACCESS >C<
Ch. 7 - Prob. 1QSCh. 7 - Prob. 2QSCh. 7 - Prob. 3QSCh. 7 - QS 7-4 Distinguishing between allowance method and...Ch. 7 - Prob. 5QSCh. 7 - Prob. 6QSCh. 7 - Prob. 7QSCh. 7 - Prob. 8QSCh. 7 - Prob. 9QSCh. 7 - Prob. 10QS
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Similar questions
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