Bassett Stores Company and Fox Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for bothcompanies for two recent years is as follows (all numbers are in millions):Merchandise salesBassettFox$208,050 $292,00053,96916,96141,551Credit card receivables beginning 20,317Credit card receivables-endinga. (1) Determine the accounts receivable turnover for both companies. Round to one decimal place.Bassett StoresFox Stores(2) Determine the days' sales in receivables for both companies. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place.Bassett StoresFox Storesdaysdaysb. What conclusion can be drawn regarding the two companies and their credit card policies?

ACCOUNT RECEIVABLE TURNOVER RATIOAccount Receivable Turnover Ratio is the Ratio between Net Sales…

Answered: Bassett Stores Company and Fox Stores…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 10E: Accounts receivable analysis Xavier Stores Company and Lestrade Stores Inc. are large retail...

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Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Xavier LestradeSales $8,500,000 $4,585,000Credit card receivables—beginning 820,000 600,000Credit card receviables—ending 880,000 710,000a. Determine the (1) accounts receivable turnover and (2) the number of days’ sales in receivables for both companies. Round to one decimal place.b. Compare the two companies with regard to their credit card policies.
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Хavier Lestrade Sales $310,250 $434,350 Credit card receivables-beginning 46,788 49,619 Credit card receivables-ending 39,062 38,203 a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round answers to one decimal place. ASsume 365 days a year. Xavier Lestrade 1. Accounts receivable turnover 2. Number of days' sales in receivables days days b. Xavier's accounts receivable turnover is than Lestrade's. The number of days' sales in receivables is for Xavier than for Lestrade. These differences indicate that Xavier is able to turn over its receivables quickly than Lestrade. As a result, it takes Xavier time to collect…
Bassett Stores Company and Fox Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (all numbers are in millions): Bassett Fox Merchandise sales $229,950 $321,200 Credit card receivables—beginning 37,356 66,625 Credit card receivables—ending 31,188 51,295 a. (1) Determine the accounts receivable turnover for both companies. Round to one decimal place. Bassett Stores fill in the blank 1 Fox Stores fill in the blank 2 (2) Determine the days' sales in receivables for both companies. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Bassett Stores fill in the blank 3 days Fox Stores fill in the blank 4 days b. What conclusion can be drawn regarding the two companies and…
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Xavier Lestrade Sales $219,000 $306,600 Credit card receivables-beginning 40,352 63,501 Credit card receivables-ending 33,688 48,891 a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round answers to one decimal place. Assume 365 days a year. Xavier Lestrade 1. Accounts receivable turnover fill in the blank 1 fill in the blank 2 2. Number of days' sales in receivables fill in the blank 3 days fill in the blank 4 days b. Xavier’s accounts receivable turnover is than Lestrade’s. The number of days' sales in receivables is for Xavier than for Lestrade. These…
The following transactions affecting the accounts receivable of FST Inc. took place during the year ended December 31: Sales (Cash & Credit) 5,900,000 Cash received from credit customers, all of whom took advantage of the discount feature of the entity’s credit term 4/10, n/30 3,024,000 Cash received from cash customers 2,100,000 Accounts receivable written off as worthless 50,000 Credit memorandum issued to credit customers for sales return and allowances 250,000 Cash refund given to cash customers for sales return and allowances 20,000 Recoveries on account receivable written off as uncollectible in prior periods (not included in cash amount stated above) 80,000 The following balances were taken from the January 1 Statement of Financial Position: Accounts Receivable 950,000 Allowance for Doubtful account 100,000 The entity provided for uncollectible account losses by crediting allowance for doubtful accounts in the…
The following transactions affecting the accounts receivable of FST Inc. took place during the year ended December 31: Sales (Cash & Credit) 5,900,000 Cash received from credit customers, all of whom took advantage of the discount feature of the entity’s credit term 4/10, n/30 3,024,000 Cash received from cash customers 2,100,000 Accounts receivable written off as worthless 50,000 Credit memorandum issued to credit customers for sales return and allowances 250,000 Cash refund given to cash customers for sales return and allowances 20,000 Recoveries on account receivable written off as uncollectible in prior periods (not included in cash amount stated above) 80,000 The following balances were taken from the January 1 Statement of Financial Position: Accounts Receivable 950,000 Allowance for Doubtful account 100,000 The entity provided for uncollectible account losses by crediting allowance for doubtful accounts in the…
Dedpul Company provided the following transactions affecting accounts receivable during the current year: Sales (cash and credit) P5,900,000 Cash received from credit customers, all of whom took advantage of the discount feature of the credit terms 4/10, n/30 3,024,000 Cash received from cash customers 2,100,000 Accounts receivable written off as worthless 50,000 Credit memorandum issued to credit customers for sales returns and allowances 250,000 Cash refunds given to cash customers for sales returns and allowances 20,000 Recoveries on accounts receivable written off as uncollectible in prior periods not included in cash received from customers stated above 80,000 The balances on January 1 were as follows: Accounts receivable P950,000 Allowance for doubtful accounts 100,000 The entity provided for uncollectible account losses by crediting allowances for doubtful accounts in the amount of P70,000 for the…
Pharoah Company has a balance in its Accounts Receivable control account of $ 11,300 on January 1, 2022. The subsidiary ledger contains three accounts: Bixler Company, balance $ 3,700; Cuddyer Company, balance $ 2,900; and Freeze Company. During January, the following receivable-related transactions occurred. Credit Sales Collections Returns Bixler Company $ 8,600 $ 8,400 $ 0 Cuddyer Company 6,700 2,400 3,500 Freeze Company 8,200 9,300 0 (a) What is the January 1 balance in the Freeze Company subsidiary account? Balance in the Freeze Company subsidiary account $ enter the balance in the Freeze Company subsidiary account in dollars (b) What is the January 31 balance in the control account? Balance in the control account $ enter the balance in the control account in dollars (c) Compute the balances in the subsidiary accounts at the end of the month. Balances in the subsidiary accounts…
Malachi Department Store starts its business on May 1, 2022 and completes the following transactions relating to its credit card sales during May: Total sales charged by customers are as follows: BPI P 600,000 RCBC 1,200,000 Eastwest 1,500,000 Deposits made by banks to charge the account of Malachi for credit card sales, net of 3% service charge. BPI P 407,400 RCBC 814,800 Eastwest 1,018,500. How much is the accounts receivable as of May 31, 2022?
Blossom Company has a balance in its Accounts Receivable control account of $11,300 on January 1, 2022. The subsidiary ledger contains three accounts: Bixler Company, balance $4,200: Cuddyer Company, balance $2,200, and Freeze Company. During January the following receivable-related transactions occurred. Bixler Company Cuddyer Company Freeze Company (a) Credit Sales Collections $9,000 $7,900 2.600 8.800 7.100 8.500 Returns $0 3.000 Balance in the Freeze Company subsidiary account S 0 What is the January 1 balance in the Freeze Company subsidiary account?
ed Softee Sodas and Patterson Beverage Company 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 Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 2018 $ 35,660 4,130 550 3,580 Softee Sodas 2017 $ 39,520 4,390 540 3,850 Patterson Beverage Company 2016 $ 44,440 4,580 530 4,050 2018 $ 71,440 7,680 100 7,580 2017 $ 72,120 7,590 130 2016 $ 66,660 7,250 140 7,460 7,110 Required: 1. Calculate the receivables turnover ratios and days to collect for Softee Sodas and Patterson Beverage Company 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…
Sunland Company has a balance in its Accounts Receivable control account of $11,100 on January 1, 2022. The subsidiary ledger contains three accounts: Bixler Company, balance $4,400; Cuddyer Company, balance $2,500; and Freeze Company. During January, the following receivable-related transactions occurred. Credit Sales Collections Returns Bixler Company $8,500 $7,600 $ 0 Cuddyer Company 6,900 2,200 2,500 Freeze Company 8,600 8,900 0 What is the January 1 balance in the Freeze Company subsidiary account? Balance in the Freeze Company subsidiary account $enter the Balance in the Freeze Company subsidiary account in dollars

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