EBK FINANCIAL ACCOUNTING
15th Edition
ISBN: 8220103648639
Author: Duchac
Publisher: YUZU
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Chapter 9, Problem 7CP
Apple Inc. designs, manufactures, and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer, and business customers. Substantially all of the company’s sales over the last five years are from sales of its Macs, iPods, iPads, and related software and peripherals. For two recent fiscal years, Apple reported the following (in millions):
Assume that the accounts receivable (in millions) were $24,094 at the beginning of fiscal Year 1.
- 1. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places.
- 2. Compute the days’ sales in receivables at the end of Year 2 and Year 1. Use 365 days and round to one decimal place.
- 3.
What conclusions can be drawn from (1) and (2) regarding Apple’s efficiency in collecting receivables?
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Apple Inc. designs, manufactures, and markets personal computers and related personal
computing and communicating solutions for sale primarily to education, creative, consumer,
and business customers. Substantially all of the company's sales over the last five years
are from sales of its Macs, iPods, iPads, and related software and peripherals. For two
recent fiscal years, Apple reported the following (in millions):
Year 2
Year 1
Sales
$233,715
$182,795
Accounts receivable at end of year
35,889
31,537
Assume that the accounts receivable (in millions) were $24,094 at the beginning of
fiscal Year 1.
1. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal
places.
2. Compute the days' sales in receivables at the end of Year 2 and Year 1. Use 365 days
and round to one decimal place.
What conclusions can be drawn from (1) and (2) regarding Apple's efficiency
3.
in collecting receivables?
MC Corporation manufactures large-scale, high-performance computer systems. In a recent annual report, the balance sheet included the following information ($ in millions):
2015
2014
Current assets:
Receivables, less allowances of $90 in 2015 and $72 in 2014
$
3,977
$
4,413
In addition, the income statement reported sales revenue of $24,704 ($ in millions) for the current year. All sales are made on a credit basis. The statement of cash flows indicates that cash collected from customers during the current year was $25,737 ($ in millions). Note that there could have been significant recoveries of accounts receivable previously written off. Required:1. Compute the following ($ in millions):
The net amount of bad debts written off or reinstated by EMC during 2015.
The amount of bad debt expense or reduction of bad debt expense that EMC included in its income statement for 2015.
2. Suppose that EMC had used the direct write-off method to account for bad…
Libscomb Technologies' annual sales are $6,974,991 and all sales are made on credit, it purchases $3,511,535 of materials each year (and this is its cost of goods sold). Libscomb also has $550,869 of inventory, $522,928 of accounts receivable, and $477,584 of accounts payable. Assume a 365 day year.
What is Libscomb’s Inventory Turnover?
Chapter 9 Solutions
EBK FINANCIAL ACCOUNTING
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