Coca-Cola and PepsiCo are two of the largest and most successful beverage companies in the world in terms of the products that theysell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following informationassumed to have been reported in their 2020, 2019, and 2018 annual reports (amounts in millions).Coca-ColaPepsiCo2019Fiscal Year Ended:2020201920182020Net Sales$31,844$36,8573,38368$25,2882,77075$ 49,2513,90482$44,2743,790812018$36,3373,26776Accounts Receivable3,16167Allowance for Doubtful AccountsAccounts Receivable, Net of Allowance3,0943,3152,6953,8223,7093,191Required:1. Calculate the receivables turnover ratios and days to collect for Coca-Cola and PepsiCo for 2020 and 2019. (Consider a 365 days ayear. Round your intermediate answers and final answers to 1 decimal place.)2020Coca-ColaPepsiCoReceivables turnover ratioDays to collect2019Receivables turnover ratiotimesdaystimesdaysDays to collect2. Which of the companies is quicker to convert its receivables into cash?O Coca-ColaO PepsiCotimesdaysCoca-ColatimesdaysPepsiCo

Receivable Turnover Ratio - The receivable Turnover Ratio shows in the financial year how many times…

Coca-Cola and PepsiCo 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 information assumed to have been reported in their 2020, 2019, and 2018 annual reports (amounts in millions). Coca-Cola PepsiCo Fiscal Year Ended: 2020 2019 2018 2020 2019 Net Sales $31,844 $36,857 $44,274 $25,288 2,770 75 $49,251 3,904 82 2018 $36,337 3,267 76 Accounts Receivable 3,161 67 3,383 68 3,790 81 Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 3,094 3,315 2,695 3,822 3,709 3,191 Required: 1. Calculate the receivables turnover ratios and days to collect for Coca-Cola and PepsiCo for 2020 and 2019. (Consider a 365 days a year. Round your intermediate answers and final answers to 1 decimal place.) 2020 Coca-Cola PepsiCo Receivables turnover ratio Days to collect 2019 Receivables turnover ratio times days times days Days to collect 2. Which of the companies is quicker to convert its receivables into cash? O Coca-Cola O PepsiCo times days Coca-Cola times days PepsiCo

Coca-Cola and PepsiCo 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 information assumed to have been reported in their 2020, 2019, and 2018 annual reports (amounts in millions). Coca-Cola PepsiCo Fiscal Year Ended: 2020 2019 2018 2020 2019 Net Sales $31,844 $36,857 $44,274 $25,288 2,770 75 $49,251 3,904 82 2018 $36,337 3,267 76 Accounts Receivable 3,161 67 3,383 68 3,790 81 Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 3,094 3,315 2,695 3,822 3,709 3,191 Required: 1. Calculate the receivables turnover ratios and days to collect for Coca-Cola and PepsiCo for 2020 and 2019. (Consider a 365 days a year. Round your intermediate answers and final answers to 1 decimal place.) 2020 Coca-Cola PepsiCo Receivables turnover ratio Days to collect 2019 Receivables turnover ratio times days times days Days to collect 2. Which of the companies is quicker to convert its receivables into cash? O Coca-Cola O PepsiCo times days Coca-Cola times days PepsiCo

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 8PB: The following select financial statement information from Vortex Computing. Compute the accounts...

See similar textbooks

Similar questions

Percentage of Credit Sales Method Ruby Red manufactures, markets, and distributes citrus flavored soft drinks across the globe. Ruby Red hired a collection agency in 2018 to increase collection rates from customers. As a result, Ruby estimates that only 2% of its 2019 credit sales will be written off, compared to the 4% of 2018s credit sales that were estimated to be uncollectible. At December 31, 2019, Ruby Red has a $12,800 credit balance in its allowance for doubtful accounts and credit sales of $1,570,000. Required: Use the percentage of credit sales method to calculate the bad debt expense.
Millennial Manufacturing has net credit sales for 2018 in the amount of $1,433,630, beginning accounts receivable balance of $585,900, and an ending accounts receivable balance of $621,450. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2018 (round answers to two decimal places). What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of days sales ratio is 180 days?
Problem 12Rosalie Co. uses the gross method to record sales made on credit. On June 10, 2020, it made sales of P100,000 with terms 2/10, n/30 to Finley Farms, Inc. On June 19, 2020, Rosalie received payment for 1/2 the amount due from Finley Farms. Rosalie’s fiscal year end is on June 30, 2020. What amount will be reported in the statement of financial position for the accounts receivable due from Finley farms, Inc.? _________Problem 13On the December 31, 2020 balance sheet of Mann Co., the current receivables consisted of the following: Trade accounts receivable 93,000 Allowance for uncollectible accounts (2,000) Claim against shipper for goods lost in transit (November 2020) 3,000 Selling price of unsold goods sent by Mann on consignment at 130% of cost (not included in Mann’s ending inventory) 26,000 Security deposit on lease of warehouse used for storing some inventories 30,000Total 150,000On December 31, 2020, the correct total of Mann’s current net receivables was _________.…
You are considering two possible companies for investment purposes. The following data is available for each company. Company A Net credit sales, Dec. 31, 2019 $540,000 Net Accounts receivable, Dec 31, 2018 $120,000 Net accounts receivable, Dec 31, 2019 $180,000 Number of days sales in receivables ratio, 2018 103 days Net Income, Dec. 31, 2018 $250,000 Company B Net credit sales, Dec. 31, 2019 $620,000 Net Accounts receivable, Dec 31, 2018 $145,000 Net accounts receivable, Dec 31, 2019 $175,000 Number of days sales in receivables ratio, 2018 110 days Net Income, Dec. 31, 2018 $350,000 Additional Information: Company A: Bad debt estimation percentage using the income statement method is 6%, and the balance sheet…
work Assignment Cola Inc. and Soda Co. are two of the largest and most successful beverage companies in the world in terms of sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the amounts reported in their annual reports (amounts in millions). Soda Co. Cola Inc. 2015 2014 2013 2015 2014 2013 $61,938 $47,432 $47,251 4,794 98 Fiscal Year Ended: $39,319 $35,190 $35,944 3,893 Net Sales 3,864 4,578 3,221 6,547 Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 56 63 59 152 78 4,522 3,830 3,162 6,395 4,696 3,786 Required: 1. Calculate the receivables turnover ratios and days to collect for Cola Inc. and Soda Co. for 2015 and 2014. (Use Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers t Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation.) 2015 2014 Cola Inc. Soda Co. Cola Inc. Soda Co.…
What are the firm's days' sales outstanding for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 Assets 2018 2019 $1,265 | Cash $780 Short-Term investments $92 | Accounts rec. Sales Revenue $1,180 $35 $20 $660 $20 $5 Less: Cost of goods sold Less: Operating Expenses Less: Depreciation Earnings before interest and taxes Less: Interest paid $75 190 235 $50 Inventory $343 Total Current Assets $40 250 300 $405 $495 $560 $170 $150 | Net fixed assets 990 1,105 Taxable Income $235 $193 Less: Taxes (40%) $94 $77 Total assets $1,485 1,665 Net income $141 $116 Liabilities and Owner's Equity Dividends (45%) Additions to Retained Earnings $63 $52 2018 2019 $78 $64 Accounts payable $125 $100 Accruals $10 $10 Notes payable 35 40 Total Current Liabilities $170 $150 Long-term debt 598 790 Total Liabilities $768 $940 Common stock 554 498 Retained earnings Total Equity Total liab.& equity 163 $227 717 $725 $1,485 $1,665
Below are some of Facebook's financial ratios for fiscal 2020 and fiscal 2019. 2020 2019 Quick Ratio 1.0 1.5 Days Receivable 8 days 6 days Return on Assets 16% 18% Gross Margin % 80% 60% Debt-to-Equity Ratio 1.3 1.1 1. Is Facebook's Quick Ratio more favorable in 2020 or 2019? 2. Does Facebook's Days Receivable ratio suggest that the company is collecting receivables faster in 2020 or 2019? 3. Is Facebook's Return on Assets more favorable in 2020 or 2019? 4. Is Facebook's Gross Margin percentage more favorable in 2020 or 2019? 5. Does Facebook's Debt-to-Equity ratio suggest that the company carrying more debt per unit of equity in 2020 or 2019?
Nordstrom, Inc. operates department stores in numerous states. Selected hypothetical financial statement data (in millions) for 2025 are presented below. Cash and cash equivalents Accounts receivable (net) Inventory Other current assets Total current assets Total current liabilities End of Year Current ratio: $740 2,080 Accounts receivable turnover Average collection period 860 650 $4,330 $2,010 Beginning of Year $79 1.900 For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by opcing activities was $1,251 million. 890 Compute the current ratio, accounts receivable turnover, average collection period, inventory turnover, and days in inventory for the current year. (Round current ratio to 2 decimal places, eg 1.83 and all other answers to 1 decimal place, e.g. 1.8. Use 365 days for calculation) 371 $3,240 $1,640 :1 times days C
DJ Company’s net accounts receivable were P250,000 as of December31, 2019, and P300,000 as of December 31, 2020. Net cash sales for 2020were P100,000. The accounts receivable turnover for 2020 was 5.00.What were DJ’s total net sales for 2020? A. P1,500,000B. P1,475,000C. P1,400,000D. P1,375,000
Walmart Revenue The annual revenue of Walmart is given in the table below (source ). Walmart Annual Revenue (Billions of US dollars) 559.151 Year 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 523.964 514.405 500.343 485.873 482.130 485.651 476.294 468.651 446.509 421.849 408.085 404.254 377.023 348.368 312.101 284.310 Apply linear regression to the data in the table to find a model y = mx + b, where y is Walmart's annual revenue in billions of US dollars, and a is the number of years since 2000. Use the model y = mx + b with m rounded to the nearest tenth and 6 rounded to the nearest
The following table presents selected 2020 annual income statement items and balance sheet items for Toyota Motor and Apple. All figures are in millions. Use the information to answer the questions that follow. Sales Cost of goods sold Accounts receivable Inventory Accounts payable Toyota ¥31,095,245 24,602,364 8,717,065 2,438,918 2,443,780 a. operating cycle cash conversion cycle b. cash conversion cycle conversion cycle a. Calculate the length of the operating cycle for Toyota and Apple. b. Calculate the length of the cash conversion cycle for Toyota and Apple. Note: Negative value should be indicated by parentheses. Round your answers to 1 decimal place. Apple Apple $ 278,515 173,559 20, 120 8,061 46,296 Toyota days days days days
DJ Company's net accounts receivable were P250,000 as of December 31, 2019, and P300,000 as of December 31, 2020. Net cash sales for 2020 were P100,000. The accounts receivable turnover for 2020 was 5.00. What were DJ's total net sales for 2020? * P1,500,000 P1,475,000 P1,375,000 P1,400,000