Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 17, Problem 6E
To determine
Express the
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Gray Company’s year-end balance sheets follow. (1) Express the balance sheets in common-size percent. Round percent to one decimal. (2) Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? (3) Is the change in merchandise inventory as a percentage of total assets favorable or unfavorable?
At December 31
Current Year
1 Year Ago
Assets
Cash
$ 31,800
$ 35,625
Accounts receivable, net
89,500
62,500
Merchandise inventory
112,500
82,500
Prepaid expenses
10,700
9,375
Plant assets, net
278,500
255,000
Total assets
$523,000
$445,000
Liabilities and Equity
Accounts payable
$129,900
$ 75,250
Long-term notes payable
98,500
101,500
Common stock, $10 par value
163,500
163,500
Retained earnings
131,100
104,750
Total liabilities and equity…
Based on the following data, what is the accounts receivable turnover?
Sales on account during year
Cost of goods sold during year
Accounts receivable, beginning of year
Accounts receivable, end of year
Inventory, beginning of year
Inventory, end of year
Oa. 11.7
Ob. 5.4
Oc. 2.7
C.
Od. 11.9
$590,953
217,271
49,800
50,913
88,221
108,726
Simon Company’s year-end balance sheets follow. (1) Express the balance sheets in common-size percents. Round percents to one decimal. (2) Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? (3) Is the change in merchandise inventory as a percentage of total assets favorable or unfavorable?
Chapter 17 Solutions
Principles of Financial Accounting.
Ch. 17 - A companys sales in the prior year were 300,000...Ch. 17 - Prob. 2MCQCh. 17 - What is Ella Companys acid-test ratio? a. 2.39 b....Ch. 17 - Prob. 4MCQCh. 17 - What is Ella Companys equity ratio? a. 25.78% b....Ch. 17 - Explain the difference between financial reporting...Ch. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQ
Ch. 17 - Why is working capital given special attention in...Ch. 17 - What does the number of days sales uncollected...Ch. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 11DQCh. 17 - Prob. 12DQCh. 17 - Prob. 13DQCh. 17 - Refer to Apples financial statements in Appendix...Ch. 17 - Prob. 15DQCh. 17 - Prob. 16DQCh. 17 - Use Samsungs financial statements in Appendix A to...Ch. 17 - Prob. 1QSCh. 17 - Identify which standard of comparison, (a)...Ch. 17 - Prob. 3QSCh. 17 - Prob. 4QSCh. 17 - Prob. 5QSCh. 17 - Prob. 6QSCh. 17 - Mifflin Co. reported the following for the current...Ch. 17 - Prob. 8QSCh. 17 - Prob. 9QSCh. 17 - Prob. 10QSCh. 17 - Prob. 11QSCh. 17 - Prob. 12QSCh. 17 - Prob. 13QSCh. 17 - Prob. 14QSCh. 17 - Which of the following gains or losses would...Ch. 17 - Building blocks of analysis Match the ratio to the...Ch. 17 - Prob. 2ECh. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Prob. 6ECh. 17 - Refer to Simon Companys balance sheets in Exercise...Ch. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - Prob. 12ECh. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 15ECh. 17 - Prob. 16ECh. 17 - In the current year, Randa Merchandising, Inc.,...Ch. 17 - Use the financial data for Randa Merchandising,...Ch. 17 - Selected comparative financial statements of...Ch. 17 - Selected comparative financial statements of...Ch. 17 - Prob. 3APCh. 17 - Selected current year-end financial statements of...Ch. 17 - Comparative ratio analysis Summary information...Ch. 17 - Selected account balances from the adjusted trial...Ch. 17 - Prob. 1BPCh. 17 - Prob. 2BPCh. 17 - Prob. 3BPCh. 17 - Prob. 4BPCh. 17 - Summary information from the financial statements...Ch. 17 - Prob. 6BPCh. 17 - Prob. 17SPCh. 17 - Use Apples financial statements in Appendix A to...Ch. 17 - Prob. 2AACh. 17 - Prob. 3AACh. 17 - Prob. 1BTNCh. 17 - Prob. 3BTNCh. 17 - Prob. 5BTN
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- Financial statement data for years ending December 31 for Holland Company follow: a. Determine the inventory turnover for 20Y4 and 20Y3. b. Determine the days sales in inventory for 20Y4 and 20Y3. Use 365 days and round to one decimal place. c. Does the change in inventory turnover and the days sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable trend?arrow_forwardUnder the periodic inventory system, what account is debited when an estimate is made for sales made this year, but expected to be returned next year? (a) Sales Returns and Allowances (b) Merchandise Inventory (c) Customer Refunds Payable (d) Salesarrow_forwardUnder the periodic inventory system, what account is credited when an estimate is made for sales made this year, but expected to be returned next year? (a) Merchandise Inventory (b) Customer Refunds Payable (c) Sales (d) Sales Returns and Allowancesarrow_forward
- Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.arrow_forwardJuroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: 1. Calculate the return on sales. (Note: Round the percent to two decimal places.) 2. CONCEPTUAL CONNECTION Briefly explain the meaning of the return on sales ratio, and comment on whether Juroes return on sales ratio appears appropriate.arrow_forwardInventory analysis A company reports the following: Determine (a) the inventory turnover and (b) the number of days sales in inventory. Round to one decimal place.arrow_forward
- Based on the following data, what is the accounts receivable turnover? Sales on account during year $536,923 Cost of goods sold during year 216,047 Accounts receivable, beginning of year 43,517 Accounts receivable, end of year 50,956 Inventory, beginning of year 87,109 Inventory, end of year 111,914 a.2.5 b.4.8 c.11.4 d.12.3arrow_forward6. Accounts receivable turnover is 8. What is the average collection period assuming annual data are used? What is the average collection period if quarterly data are used? 7. Sales for the year amount to P3,000,000, Accounts receivable is P360,000. What is the average collection period assuming annual data is used? quarterly data is used? 8. Beginning inventory is P40,000, ending inventory is P28,000. Cost of goods sold is double the ending inventory and accounts payable is P44,000,. What is the accounts payable turnover? 9. The quick ratio is 1.75 while the current ratio is 2.5. the current liabilities amount to P525,000. Cost of goods sold is P955,000. What is the inventory turnover? of inventory? what is the average age 10. Ending inventory is P33,000 while accounts payable is P5,000. Purchases were half the ending inventory. What is the accounts payable turnover? inventory? What is the average age ofarrow_forwardUsing the following data for the current year, determine the accounts receivable turnover. Net sales on account during the year $ 457,065 Cost of merchandise sold during the year 461,280 Accounts receivable, beginning of year 75,290 Accounts receivable, end of year 26,280 Inventory, beginning of year 185,000 Inventory, end of year 169,570 a.7 b.8 c.10 d.9arrow_forward
- The following data are taken from or calculated from the financial statements: Average accounts receivable (net) Sales on account a. Assuming that credit terms on all sales are n/45, determine for each year (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round intermediate calculations to whole numbers and final answers to two decimal places. 1. The accounts receivable turnover: Current Year Preceding Year 2. The number of days' sales in receivables: Assume a 365-day year. Current Year days Current Year Preceding Year $123,000 950,000 $95,000 825,000 Preceding Year days b. Comment on any significant trends revealed by the data. Sales during the current year, indicating a(n) trend. The accounts receivable turnover has collected within the 45-day period. Likewise, the number of days' sales in receivables indicates a(n) . Based on credit terms of n/45, the current year turnover indicates that trend. receivables are not beingarrow_forwardThe numerator in calculating the accounts receivable turnover is a. average accounts receivable b. accounts receivable at year-end c. sales d. total assetsarrow_forwardComparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 500,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company's common stock at the end of the year was $30. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses $ 1,090 9,200 12,500 740 $ 1,320 7,500 11,800 540 Total current assets 23,530 21,160 Property and equipment: Land 9,200 44,083 9,200 39,201 Buildings and equipment, net Total property and equipment 53,283 48,401 Total assets $76,813 $69,561 Liabilities and Stockholders' Equity Current…arrow_forward
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