College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 15, Problem 4MC
To determine
Identify the option that is divided by average
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Which of the following calculations of receivable turnover is correct? A. Number of days in the year divided by receivable turnover. B. Net sale on account divided by average receivables. C. Cost of goods sold divided by average inventory. D. Net income divided by net sales.
a. Compute the following ratios:
i. Accounts Receivable Turnover ratio;ii. Accounts Payable Turnover ratio;iii. Average Collection Period;iv. Average Payable Period;v. Quick Ratio;vi. Gross Profit Margin.vii. Net Profit Marginviii. Debt ratiob
b. Explain briefly what is factoring?
Questions:
1. Accounts receivable turnover (assume all sales are on account)
2. Average collection period
Chapter 15 Solutions
College Accounting, Chapters 1-27
Ch. 15 - LO1 A multiple-step form of income statement...Ch. 15 - Prob. 2TFCh. 15 - Prob. 3TFCh. 15 - Prob. 4TFCh. 15 - LO4 Accounts receivable turnover is the number of...Ch. 15 - Prob. 1MCCh. 15 - Prob. 2MCCh. 15 - Prob. 3MCCh. 15 - Prob. 4MCCh. 15 - Prob. 5MC
Ch. 15 - Prob. 1CECh. 15 - Prob. 2CECh. 15 - Prob. 3CECh. 15 - Prob. 4CECh. 15 - Prob. 5CECh. 15 - Prob. 6CECh. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Describe how to calculate the following ratios (a)...Ch. 15 - Where is the information obtained that is needed...Ch. 15 - Explain the function of each of the four closing...Ch. 15 - What is the purpose of a post-closing trial...Ch. 15 - What is the primary purpose of reversing entries?Ch. 15 - What is the customary date for reversing entries?Ch. 15 - What adjusting entries should be reversed?Ch. 15 - REVENUE SECTION. MULTIPLE-STEP INCOME STATEMENT...Ch. 15 - COST OF GOODS SOLD SECTION, MULTIPLE-STEP INCOME...Ch. 15 - MULTIPLE-STEP INCOME STATEMENT Use the following...Ch. 15 - FINANCIAL RATIOS Based on the financial statements...Ch. 15 - CLOSING ENTRIES Using the spreadsheet and...Ch. 15 - REVERSING ENTRIES From the spreadsheet used in...Ch. 15 - ADJUSTING, CLOSING, AND REVERSING ENTRIES Prepare...Ch. 15 - INCOME STATEMENT, STATEMENT OF OWNERS EQUITY, AND...Ch. 15 - FINANCIAL RATIOS Use the spreadsheet and financial...Ch. 15 - END-OF-PERIOD SPREADSHEET, ADJUSTING, CLOSING, AND...Ch. 15 - REVENUE SECTION, MULTIPLE-STEP INCOME STATEMENT...Ch. 15 - COST OF GOODS SOLD SECTION, MULTIPLE-STEP INCOME...Ch. 15 - MULTIPLE-STEP INCOME STATEMENT Use the following...Ch. 15 - FINANCIAL RATIOS Based on the financial...Ch. 15 - CLOSING ENTRIES Using the spreadsheet and...Ch. 15 - Prob. 6SEBCh. 15 - Prob. 7SEBCh. 15 - INCOME STATEMENT, STATEMENT OF OWNERS EQUITY, AND...Ch. 15 - FINANCIAL RATIOS Use the work sheet and financial...Ch. 15 - END-OF-PERIOD SPREADSHEET, ADJUSTING, CLOSING, AND...Ch. 15 - Prob. 1MYWCh. 15 - Dominique Fouque owns and operates Dominiques Doll...Ch. 15 - Prob. 1CPCh. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Prob. 2.1COPCh. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Prob. 2.4COPCh. 15 - Prob. 2.5COPCh. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Prob. 2.8COP
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- Receivables turnover ratio= (net sales) / ( average accounts receivable net). What is included in average accounts receivable (+ or - bad & doubtful debts, + or - sales returns and allowances, or other that may or may not be included). Thank you.arrow_forwardTwo bases for estimating uncollectible accounts are: Select one: O A percentage of recelvables and percentage of sales. O B. percentage of current assets and percentage of sales. O C. percentage of recelvables and percentage of total revenue. O D. percentage of assets and percentage of sales.arrow_forwardDividing net sales on account by the average amount of net accounts receivable is the calculation for the a.merchandise inventory turnover. b.working capital turnover. c.plant and equipment turnover. d.accounts receivable turnover.arrow_forward
- Compute for the following RED 1. Accounts receivable turnover 2. Average collection periodarrow_forwardWhat entry format is appropiate if sales returns and allowances occur on factored accounts? a. Sales returns and allowances xx Receivable from factor xx b. Reveivable from Factor xx Factoring expense xx c. Sales returns and allowances xx Factoring expense xx d. Reveivable from factor xx Accounts receivable xxarrow_forward_____________ are used to measure the speed in which various accounts are converted into sales or cash. Select one:. a. Liquidity ratios b. Profitability ratios c. Activity ratios d. Debt ratiosarrow_forward
- _____________ are used to measure the speed in which various accounts are converted into sales or cash. Select one: a.Liquidity ratios b.Profitability ratios. c.Activity ratios d.Debt ratiosarrow_forwardThe following information is taken from Randy Technology's statements of financial position at December 31, 2019 and 2020, and their income statement for calendar 2020: 2020 2019 Assets: Cash $ 38,000 $ 42,000 Short Term investments. 25,000 -0- Accounts receivable, 118,000 22,000 Inventory. 151,000 42,000 Prepaid insurance. 16,000 19,000 Long-term investments 49,000 20,000 Equipment (net). 130,000 130,000 Land 33,000 33,000 Goodwill 45,000 45,000 Total assets.. $ 605,000 $ 353,000 Net income. S 52,250 Sales (all on credit) 295,000 Cost of goods sold. 123,000. Interest expense. 15,600 Income tax expense.….... 17,450 Tax rate = 26% %3D Required: From the above information, calculate the following ratios for 2020:arrow_forwardHow do you calculate accounts receivable turnover? Select an answer: Take the beginning A/R balance, add the ending A/R balance, divide by two, then divide the result into sales revenue Take the beginning A/R balance, add the ending A/R balance, then divide the result into sales revenue divided by two Take the ending A/R balance, subtract the beginning A/R balance, then divide the result into sales revenue. Take the starting A/R balance, subtract the ending A/R balance, then divide the result into sales revenue divided by two.arrow_forward
- 1. What is the amount of gross sale on account? 2. What are the total gross sales? 3. What are the total net sales? 4. What are the correct gross purchase on account? 5. What are the gross purchase? 6. What are the net purchases?arrow_forwardWhich of the following statements is true?a. Credit sales increase receivables.b. Collections on account decreasereceivables.c. Write-offs of accounts decreasereceivables.d. All of these statements are true.arrow_forwardwhat is the estimate of uncollectible accounts receivable based on the percentage of salesarrow_forward
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