FUND. OF FINANCIAL ACCT. (LL) W/CONNECT
6th Edition
ISBN: 9781260725254
Author: PHILLIPS
Publisher: MCG
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Textbook Question
Chapter 8, Problem 5PB
Analyzing Allowance for Doubtful Accounts, Receivables Turnover Ratio, and Days to Collect
J. M. Smucker is well known for its fruit jams and Seneca Foods Corporation is the company behind Green Giant canned vegetables. To evaluate their ability to collect on credit sales, consider the following rounded information in their annual reports (amounts in millions).
Required:
- 1. Calculate the receivables turnover ratios and days to collect for Smucker and Seneca for the fiscal years ended in 2016 and 2015. (Round to one decimal place.)
- 2. Which of the companies is quicker to convert its receivables into cash?
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Fizzy Sodas and Hayes Companies 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).
Fiscal Year Ended:
Net Sales
Accounts Receivable
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Accounts Receivable, Net of Allowance
Req 1
Complete this question by entering your answers in the tabs below.
Req 2A
Required:
1. Calculate the receivables turnover ratios and days to collect for Fizzy Sodas and Hayes Companies for 2018 and 2017.
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?
Req 2B
Receivables Turnover Ratio
Days to collect
2018
2018
$ 40,630
4,410
620
3,790
Fizzy Sodas
Fizzy Sodas
2017
$ 45,120
4,710
610
4,100
Hayes
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The following information is from the annual financial statements of Raheem Company,
Year 2
$ 335,280
41,400
Net sales
Accounts receivable, net (year-end)
(1) Compute its accounts receivable turnover for Year 2 and Year 3.
(2) Assuming its competitor has a turnover of 11, is Raheem performing better or worse at collecting receivables than its competitor?
Complete this question by entering your answers in the tabs below.
Year 3
$ 405,140
44,800
Required 1 Required 2
Compute its accounts receivable turnover for Year 2 and Year 3.
Year 2:
Year 3:
Choose Numerator:
Accounts Receivable Turnover
Choose Denominator
7
1
1
Year 1
$ 388,000
34,800
W
Accounts Receivable Turnover.
Accounts receivable tumover
times
times
Mathis Incorporated and Hashey Companies are two of the largest and most successful toymakers in the world, in terms of the
products they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the
following information reported in their annual reports (amounts in millions).
Fiscal Year Ended:
Net Sales
Accounts Receivable
Allowance for Doubtful Accounts
Accounts Receivable, Net of Allowance
Required:
Req 1
Req 2A
1. 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 2B
Receivables Turnover Ratio
Days to Collect
2018
$ 5,656
1,158
21
1,137
Mathis
2018
Mathis
2017
$…
Chapter 8 Solutions
FUND. OF FINANCIAL ACCT. (LL) W/CONNECT
Ch. 8 - What are the advantages and disadvantages of...Ch. 8 - Prob. 2QCh. 8 - Which basic accounting principles does the...Ch. 8 - Using the allowance method, is Bad Debt Expense...Ch. 8 - What is the effect of the write-off of...Ch. 8 - How does the use of calculated estimates differ...Ch. 8 - A local phone company had a customer who rang up...Ch. 8 - What is the primary difference between accounts...Ch. 8 - What are the three components of the interest...Ch. 8 - As of May 1, 2016, Krispy Kreme Doughnuts had...
Ch. 8 - Does an increase in the receivables turnover ratio...Ch. 8 - What two approaches can managers take to speed up...Ch. 8 - When customers experience economic difficulties,...Ch. 8 - (Supplement 8A) Describe how (and when) the direct...Ch. 8 - (Supplement 8A) Refer to question 7. What amounts...Ch. 8 - 1. When a company using the allowance method...Ch. 8 - 2. When using the allowance method, as Bad Debt...Ch. 8 - 3. For many years, Carefree Company has estimated...Ch. 8 - 4. Which of the following best describes the...Ch. 8 - 5. If the Allowance for Doubtful Accounts opened...Ch. 8 - 6. When an account receivable is recovered a....Ch. 8 - Prob. 7MCCh. 8 - 8. If the receivables turnover ratio decreased...Ch. 8 - Prob. 9MCCh. 8 - Prob. 10MCCh. 8 - Prob. 1MECh. 8 - Evaluating the Decision to Extend Credit Last...Ch. 8 - Reporting Accounts Receivable and Recording...Ch. 8 - Recording Recoveries Using the Allowance Method...Ch. 8 - Recording Write-Offs and Bad Debt Expense Using...Ch. 8 - Determining Financial Statement Effects of...Ch. 8 - Estimating Bad Debts Using the Percentage of...Ch. 8 - Estimating Bad Debts Using the Aging Method Assume...Ch. 8 - Recording Bad Debt Estimates Using the Two...Ch. 8 - Prob. 10MECh. 8 - Prob. 11MECh. 8 - Recording Note Receivable Transactions RecRoom...Ch. 8 - Prob. 13MECh. 8 - Determining the Effects of Credit Policy Changes...Ch. 8 - Prob. 15MECh. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Bad Debt Expense Estimates and...Ch. 8 - Determining Financial Statement Effects of Bad...Ch. 8 - Prob. 3ECh. 8 - Recording Write-Offs and Recoveries Prior to...Ch. 8 - Prob. 5ECh. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Recording and Reporting Allowance for Doubtful...Ch. 8 - Recording and Determining the Effects of Write-Off...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Using Financial Statement Disclosures to Infer...Ch. 8 - Using Financial Statement Disclosures to Infer Bad...Ch. 8 - Prob. 15ECh. 8 - Analyzing and Interpreting Receivables Turnover...Ch. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions Jung ...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions CS...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Prob. 2PBCh. 8 - Prob. 3PBCh. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording and Reporting Credit Sales and Bad Debts...Ch. 8 - Prob. 2COPCh. 8 - Recording Daily and Adjusting Entries Using FIFO...Ch. 8 - Prob. 1SDCCh. 8 - Prob. 2SDCCh. 8 - Ethical Decision Making: A Real-Life Example You...Ch. 8 - Critical Thinking: Analyzing the Impact of Credit...Ch. 8 - Using an Aging Schedule to Estimate Bad Debts and...Ch. 8 - Accounting for Receivables and Uncollectible...
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