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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

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Answer 1

Question

Chapter 8, Problem 8.14E

(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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

(b)

To determine

To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

(c)

To determine

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

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2. Using the following select financial statement information from Black Water Industries, compute the accounts receivable turnover ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Black Water Industries? Year 2017 2018 2019 BLACK WATER INDUSTRIES Net Credit Sales $685,430 700,290 768,500 Ending Accounts Receivable $330,250 360,450 401,650

1))For the years ended December 31, 2018 of your analysis, assume all sales are on credit and then compute the following: · (a) collection period, · (b) accounts receivable turnover, · (c) inventory turnover, and · (d) days' sales in inventory. · (e) Based on your estimates, comment on the changes in the ratios from 2018 year by drawing conclusion regarding efficiency in managing inventory and in collecting receivables (Note: Comment not more than 10 lines). 2))Provide your recommendations for improving the financial condition of your company. (Note: Comment not more than 10 lines).

Following is a list of balance sheet accounts for Branman Co. as of December 31, 2018. Solve, a. Classify each of the following accounts as an asset, liability, or net worth. b. What is the balance in the Retained Earnings account if the data forms a valid balance sheet?

Answer 2

Question

Chapter 8, Problem 8.14E

(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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

(b)

To determine

To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

(c)

To determine

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

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Answer 3

Question

Chapter 8, Problem 8.14E

(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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

(b)

To determine

To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

(c)

To determine

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

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Answer 4

Question

Chapter 8, Problem 8.14E

(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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

(b)

To determine

To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

(c)

To determine

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

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Answer 5

Chapter 8, Problem 8.14E

(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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

(b)

To determine

To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

(c)

To determine

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

Answer 6

Chapter 8, Problem 8.14E

(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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

Answer 7

Chapter 8, Problem 8.14E

(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 other words, it indicates the number of times the average amount of net accounts receivables 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, and average collection period of Corporation F for the year 2017.

Answer 8

(b)

To determine

To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

Answer 9

(b)

To determine

To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

Answer 10

(c)

To determine

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

Answer 11

(c)

To determine

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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Solution Summary: The author calculates the accounts receivable turnover and average collection period of Corporation F for the year 2017.

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To find out: whether accounts receivable is a material component of Corporation F’s current assets in 2017.

To evaluate: The balance in Corporation F’s allowance for doubtful accounts.

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