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 2 and Year 1.

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Answer 1

Question

Chapter 8, Problem 8.5CP

(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 2 and Year 1.

(b)

To determine

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

(c)

To determine

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

(d)

To determine

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

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Answer 2

Question

Chapter 8, Problem 8.5CP

(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 2 and Year 1.

(b)

To determine

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

(c)

To determine

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

(d)

To determine

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

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Answer 3

Question

Chapter 8, Problem 8.5CP

(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 2 and Year 1.

(b)

To determine

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

(c)

To determine

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

(d)

To determine

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

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Answer 4

Question

Chapter 8, Problem 8.5CP

(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 2 and Year 1.

(b)

To determine

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

(c)

To determine

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

(d)

To determine

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

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Answer 5

Chapter 8, Problem 8.5CP

(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 2 and Year 1.

(b)

To determine

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

(c)

To determine

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

(d)

To determine

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

Answer 6

Chapter 8, Problem 8.5CP

(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 2 and Year 1.

Answer 7

Chapter 8, Problem 8.5CP

(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 2 and Year 1.

Answer 8

(b)

To determine

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

Answer 9

(b)

To determine

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

Answer 10

(c)

To determine

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

Answer 11

(c)

To determine

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

Answer 12

(d)

To determine

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

Answer 13

(d)

To determine

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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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 2 and Year 1.

To conclude: The Efficiency of Corporation C’s management in collecting accounts receivables.

To ascertain: Whether Corporation C’s accounts receivable turnover ratio would be higher or lower than a typical manufacturing company.

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Chapter 8 Solutions