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. To calculate: The accounts receivable turnover for Year 1 and Year 2.

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Answer 1

Question

Chapter 8, Problem 3ADM

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.

To calculate: The accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Accounts Receivable Turnover and Days' Sales in Receivables Quasar, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. Quasar reported the following data for two recent years: Year 2 $3,311,280 Year 1 $3,372,600 Sales Accounts receivable 313,900 299,300 Assume that accounts receivable were $343,100 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round your answer to one decimal place. Year 2: Year 1: b. Compute the days' sales in receivables for Year 2 and Year 1. Round interim calculations and final answers to one decimal place. Use 365 days per year in your calculatio Year 2: Year 1: days days c. The change in accounts receivable turnover from year 1 to year 2 indicates a(n) in the efficiency of collecting accounts receivable and is a(n) change. The change in the days' sales in receivables indicates a(n) change.

American Eagle Outfitters, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. American Eagle reported the following data (in millions) for two recent years: Year 2 Year 1 Sales $3,522 $3,283 Accounts receivable 68 81 Assume that accounts receivable (in millions) were $74 million at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places. b. Compute the day's sales in receivables for Year 2 and Year 1. Use 365 days and round to one decimal place. c. What conclusions can be drawn from these analyses regarding American Eagle Outfitters' efficiency in collecting receivables?

Quasar, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. Quasar reported the following data for two recent years: Year 2 Year 1 Sales $4,446,795 $4,435,480 Accounts receivable 346,750 332,150 Assume that accounts receivable were $383,250 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place. Year 2: Year 1: b. Compute the days' sales in receivables for Year 2 and Year 1. Round interim calculations and final answers to one decimal place. Use 365 days per year in your calculations. Year 2: days Year 1: days c. The change in accounts receivable turnover from year 1 to year 2 indicates a(n) in the efficiency of collecting accounts receivable and is a(n) change. The change in the days' sales in receivables indicates a(n) change.

Answer 2

Question

Chapter 8, Problem 3ADM

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.

To calculate: The accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Answer 3

Question

Chapter 8, Problem 3ADM

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.

To calculate: The accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Answer 4

Question

Chapter 8, Problem 3ADM

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.

To calculate: The accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 3ADM

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.

To calculate: The accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

Answer 6

Chapter 8, Problem 3ADM

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.

To calculate: The accounts receivable turnover for Year 1 and Year 2.

Answer 7

Chapter 8, Problem 3ADM

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.

To calculate: The accounts receivable turnover for Year 1 and Year 2.

Answer 8

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

Answer 9

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

Answer 10

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

Answer 11

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

Answer 12

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Answer 15

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Solution Summary: The author explains accounts receivable turnover, which is calculated by dividing the net credit sales by the average amount of net accounts.

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To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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