Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 4, Problem 6YT
1.
To determine
Compute
To determine
Determine the days to collect an outstanding account.
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A firm has $400,000 in credit sales and $100,000 in accounts receivable.Compute accounts receivable turnover and average number of collectiondays. How do these numbers relate to the terms of 2/10, n/30?
ABCD Corporation has credit sales of $10,640,000 and receivables of $1,520,000.
a. What is the receivables turnover?b. What is the average collection period (days sales outstanding)?c. If the company offers credit terms of 30 days, are its receivables past due?
A company reports the following:
Sales
Average accounts receivable (net)
Determine (a) the accounts receivable turnover and (b) number of days' sales in receivables. Round your answers to one decimal place. Assume a 365-
day year.
a. Accounts receivable turnover
$398,580
76,650
b. Number of days' sales in receivables
days
Chapter 4 Solutions
Financial Accounting
Ch. 4 - Prob. 1YTCh. 4 - Prob. 2YTCh. 4 - Suppose at the end of the year Pendleton Corp.s...Ch. 4 - Prob. 4YTCh. 4 - Prob. 5YTCh. 4 - Prob. 6YTCh. 4 - Prob. 7YTCh. 4 - Prob. 1QCh. 4 - Prob. 2QCh. 4 - Prob. 3Q
Ch. 4 - Prob. 4QCh. 4 - What does true cash balance refer to?Ch. 4 - Identify and explain the financial statements on...Ch. 4 - Describe how accounts receivable arise. What does...Ch. 4 - Prob. 8QCh. 4 - Define net realizable value, book value, and...Ch. 4 - Explain the difference between the direct...Ch. 4 - If a company uses the allowance method of...Ch. 4 - Describe the two allowance methods used to...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - What are the advantages and disadvantages of...Ch. 4 - What is the difference between accounts receivable...Ch. 4 - What is the formula to calculate the accounts...Ch. 4 - How does a firm use its accounts receivable...Ch. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 1MCQCh. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 1SEACh. 4 - Prob. 2SEACh. 4 - Prob. 3SEACh. 4 - Prob. 4SEACh. 4 - Prob. 5SEACh. 4 - Prob. 6SEACh. 4 - Prob. 7SEACh. 4 - Prob. 8SEACh. 4 - Prob. 9SEACh. 4 - Prob. 10SEBCh. 4 - Prob. 11SEBCh. 4 - Prob. 12SEBCh. 4 - Prob. 13SEBCh. 4 - Prob. 14SEBCh. 4 - Prob. 15SEBCh. 4 - Prob. 16SEBCh. 4 - Prob. 17SEBCh. 4 - Prob. 18SEBCh. 4 - Prob. 19EACh. 4 - Prob. 20EACh. 4 - Prob. 21EACh. 4 - Prob. 22EACh. 4 - Prob. 23EACh. 4 - Prob. 24EACh. 4 - Prob. 25EACh. 4 - Prob. 26EACh. 4 - Prob. 27EACh. 4 - Prob. 28EACh. 4 - Prob. 29EACh. 4 - Prob. 30EACh. 4 - Prob. 31EACh. 4 - Prob. 32EBCh. 4 - Prob. 33EBCh. 4 - Prob. 34EBCh. 4 - Prob. 35EBCh. 4 - Prob. 36EBCh. 4 - Prob. 37EBCh. 4 - Prob. 38EBCh. 4 - Prob. 39EBCh. 4 - Prob. 40EBCh. 4 - Prob. 41EBCh. 4 - Prob. 42EBCh. 4 - Prob. 43EBCh. 4 - Prob. 44EBCh. 4 - Prob. 45PACh. 4 - Prob. 46PACh. 4 - Prob. 47PACh. 4 - Prob. 48PACh. 4 - Prob. 49PACh. 4 - Prob. 50PACh. 4 - Prob. 51PACh. 4 - Prob. 52PACh. 4 - Prob. 53PBCh. 4 - Prob. 54PBCh. 4 - Prob. 55PBCh. 4 - Prob. 56PBCh. 4 - Prob. 57PBCh. 4 - Prob. 58PBCh. 4 - Prob. 59PBCh. 4 - Prob. 60PBCh. 4 - Prob. 1FSACh. 4 - Prob. 2FSACh. 4 - The following information has been adapted from...Ch. 4 - Prob. 1CTPCh. 4 - Prob. 2CTPCh. 4 - The information given here was taken from Yahoo!...Ch. 4 - Prob. 1IECh. 4 - Prob. 2IECh. 4 - The information given here was taken from Yahoo!...
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- 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_forwardWhalen Company had net sales of 125,500,250,000. Whalen had the following balances: Required: Note: Round answers to two decimal places. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.arrow_forwardif the net sales is P200,000 and the average accounts receivable is P50,000, what is the accounts receivable turnover?arrow_forward
- A company computes its accounts receivable turnover to be 20. Based onthis information, find the average collection period. If the company has a credit collection period of 30 days, explain the relationship between thecredit collection period and the average collection period.arrow_forwardYou are an investor looking to contribute financially to either company A or Company B. The following, select financial information as follows. Company A and company B, respectively: Beginning Account Receivable $ 50,000, 60,000; Ending Account Receivable $ 80,000, 90,000; Net credit sales $ 550,000, $460,000. Based on the information provided: compute the account receivable turnover ratio. Compute the number of days sales in receivables ratio for both companies A and company B ( round all answers to two decimals places) Interpret the outcomes stating which company you would invest in and why.arrow_forwardAccounts receivable turnover is 4. What is the average collection period assuming annual data are used? What is the average collection period assuming quarterly data are used?arrow_forward
- A. Assume that all sales are on account. If sales revenue was $18,000,000 and the average days in accounts receivable was 38 days for the last operating year, what would the average accounts receivable balance have been? a. $1,680,000 b. $1,500,000 c. $1,875,000 d. $18,000,000 B. If accounts receivable is projected to be $800,000 at the beginning of the next operating year and $1,100,000 at the end of the next operating year: would cash be generated by accounts receivable or needed to fund accounts receivable? And, by how much? a. $300,000 of cash needed to fund accounts receivable b. $1,100,000 of cash needed to fund accounts receivable c. $500,000 of cash needed to fund accounts receivable d. $300,000 of cash generated by accounts receivablearrow_forwarda) Calculate Kopitiam Sdn Bud’s accounts receivable turnover ratio for Year 2 and Year 3. b) Calculate the number of days the average balance of receivables is outstanding before being converted into cash (turnover in days) for Year 2 and Year 3 c) What problem do you see with the company’s credit policy if the terms are net 30 days? Explain your answer.arrow_forwardThe net sale of a company is estimated to be SAR 384,000. How much will be the accounts receivable turnover ratio for the period if the average account receivables are SAR 32,000? O a. 12 O b. 11 O c. 15 O d. 6arrow_forward
- If Emperium Inc. had credit sales of 2,027,773 per year and its days sales outstanding was equal to 35 days, what was its average amount of accounts receivable outstanding? (Assume a 365-day year).arrow_forwardA company reports the following: Sales $838,040 Average accounts receivable (net) 51,100 Round your answers to one decimal place. Assume a 365-day year. a. Determine the accounts receivable turnover. b. Determine the number of days' sales in receivables.arrow_forwardIf you are told that LSJ Company turns its accounts receivable over every 33 days…this would represent an example of what type of analysis: a. Vertical Analysis b. Horizontal Analysis c. Ratio Analysisarrow_forward
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