Accounts receivable turnover Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period. Average collection period: Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average. (a) To calculate: The accounts receivable turnover of Company A and Incorporation B.

Question

Question Content Area Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Xavier Lestrade Sales $8,500,000 $4,585,000 Credit card receivables-beginning 820,000 600,000 Credit card receviables-ending 880,000 710,000 a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round your calculations and answers to one decimal place. Assume 365 days a year. Xavier Lestrade 1. Accounts receivable turnover fill in the blank 1 fill in the blank 2 2. Number of days' sales in receivables fill in the blank 3 days fill in the blank 4 days b. Fill in the blank: Xavier's accounts receivable turnover is much 1)_____ than Lestrade's. The…

Answer 1

Question

Chapter 8, Problem 1ADM

A.

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

(a)

To calculate: The accounts receivable turnover of Company A and Incorporation B.

B.

To determine

To calculate: The day’s sales in receivables of Company A and Incorporation B.

C.

To determine

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

D.

To determine

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

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Question Content Area Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Xavier Lestrade Sales $8,500,000 $4,585,000 Credit card receivables-beginning 820,000 600,000 Credit card receviables-ending 880,000 710,000 a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round your calculations and answers to one decimal place. Assume 365 days a year. Xavier Lestrade 1. Accounts receivable turnover fill in the blank 1 fill in the blank 2 2. Number of days' sales in receivables fill in the blank 3 days fill in the blank 4 days b. Fill in the blank: Xavier's accounts receivable turnover is much 1)_____ than Lestrade's. The…

Comparative figures for Apple and Google follow. $ millions Apple Google Current Year One Year Prior Two Years Prior Current Year One Year Prior Two Years Prior Accounts receivable, net $ 22,926 $ 23,186 $ 17,874 $ 25,326 $ 20,838 $ 18,336 Net sales 260,174 265,595 229,234 161,857 136,819 110,855 Required: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?

work Assignment Cola Inc. and Soda Co. are two of the largest and most successful beverage companies in the world in terms of sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the amounts reported in their annual reports (amounts in millions). Soda Co. Cola Inc. 2015 2014 2013 2015 2014 2013 $61,938 $47,432 $47,251 4,794 98 Fiscal Year Ended: $39,319 $35,190 $35,944 3,893 Net Sales 3,864 4,578 3,221 6,547 Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 56 63 59 152 78 4,522 3,830 3,162 6,395 4,696 3,786 Required: 1. Calculate the receivables turnover ratios and days to collect for Cola Inc. and Soda Co. for 2015 and 2014. (Use Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers t Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation.) 2015 2014 Cola Inc. Soda Co. Cola Inc. Soda Co.…

Answer 2

Question

Chapter 8, Problem 1ADM

A.

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

(a)

To calculate: The accounts receivable turnover of Company A and Incorporation B.

B.

To determine

To calculate: The day’s sales in receivables of Company A and Incorporation B.

C.

To determine

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

D.

To determine

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

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Answer 3

Question

Chapter 8, Problem 1ADM

A.

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

(a)

To calculate: The accounts receivable turnover of Company A and Incorporation B.

B.

To determine

To calculate: The day’s sales in receivables of Company A and Incorporation B.

C.

To determine

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

D.

To determine

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

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Answer 4

Question

Chapter 8, Problem 1ADM

A.

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

(a)

To calculate: The accounts receivable turnover of Company A and Incorporation B.

B.

To determine

To calculate: The day’s sales in receivables of Company A and Incorporation B.

C.

To determine

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

D.

To determine

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

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Answer 5

Chapter 8, Problem 1ADM

A.

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

(a)

To calculate: The accounts receivable turnover of Company A and Incorporation B.

B.

To determine

To calculate: The day’s sales in receivables of Company A and Incorporation B.

C.

To determine

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

D.

To determine

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

Answer 6

Chapter 8, Problem 1ADM

A.

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

(a)

To calculate: The accounts receivable turnover of Company A and Incorporation B.

Answer 7

Chapter 8, Problem 1ADM

A.

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables has been collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

(a)

To calculate: The accounts receivable turnover of Company A and Incorporation B.

Answer 8

B.

To determine

To calculate: The day’s sales in receivables of Company A and Incorporation B.

Answer 9

B.

To determine

To calculate: The day’s sales in receivables of Company A and Incorporation B.

Answer 10

C.

To determine

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

Answer 11

C.

To determine

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

Answer 12

D.

To determine

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

Answer 13

D.

To determine

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

Answer 14

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Solution Summary: The author calculates the accounts receivable turnover ratio for Company A and Incorporation B.

To calculate: The day’s sales in receivables of Company A and Incorporation B.

To evaluate: The relative efficiency between Company A and Incorporation B in collecting accounts receivables.

To explain: The possible reason for the difference in average accounts receivable turnover ratio for Company B and Incorporation A.

Chapter 8 Solutions