Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 7, Problem 7.23BE
Receivables turnover
• LO7–8
Camden Hardware’s credit sales for the year were $320,000.
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Item 2 of 25
Sixty percent of Jesse's annual sales of P900,000 is on credit. If its year-end receivables turnover is 4.5, what is the average collection period and the year-
end receivables, respectively (assume a 365-day year)?
Select the correct response:
73 days and P108,000.
81 days and P200,000.
73 days and P120,000.
81 days and P120,000.
Accounts receivable turnover and days' sales in receivables
For two recent years, Robinhood Company reported the following:
20Υ9
20Υ8
Sales
$8,712,000
$7,371,000
Accounts receivable:
Beginning of year
670,000
590,000
End of year
650,000
670,000
a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round answers to one decimal place.
20Υ8:
20Υ9:
b. Determine the days' sales in receivables for 20Y9 and 20Y8. Use 365 days and round all calculations to one decimal place.
20Υ8:
days
20Υ9:
days
C. Are the changes in the accounts receivable turnover and days' sales in receivables from 20Y8 to 20Y9 favorable or unfavorable?
Favorable v
Accounts receivable turnover and days' sales in receivables
For two recent years, Robinhood Company reported the following:
20Y9
20Υ8
Sales
$8,578,500
$7,137,000
Accounts receivable:
Beginning of year
650,000
570,000
End of year
640,000
650,000
a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round answers to one decimal place.
20Υ8:
20Υ9:
b. Determine the days' sales in receivables for 20Y9 and 20Y8. Use 365 days and round all calculations to one decimal place.
20Y8:
days
20Υ9:
days
c. Are the changes in the accounts receivable turnover and days' sales in receivables from 20Y8 to 20Y9 favorable or unfavorable?
Chapter 7 Solutions
Intermediate Accounting, 10 Ed
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Briefly explain the difference between the income...Ch. 7 - Prob. 7.14QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.17QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Prob. 7.20QCh. 7 - Prob. 7.21QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Prob. 7.10BECh. 7 - Prob. 7.11BECh. 7 - Prob. 7.12BECh. 7 - Prob. 7.13BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.16BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.19BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.21BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.24BECh. 7 - Prob. 7.25BECh. 7 - Prob. 7.26BECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.23ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Prob. 7.29ECh. 7 - Prob. 7.36ECh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.1DMPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.5DMPCh. 7 - Prob. 7.6DMPCh. 7 - Prob. 7.9DMP
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- A1 Salon Supply Corporation had net credit sales during the year of $1,200,000 and cost of goods sold of $720,000. Net accounts receivable at the beginning of the year was $120,000 and at the end of the year was $180,000. What was the accounts receivable turnover? A) 6.7 B) 8.0 C) 4.8 D) 10.0arrow_forwardQuestion 8 Calculate the average collection period for T&K Inc. if its accounts receivables were $600 at the beginning of a year in which the firm generated $9,125 of sales? O A. 67 days OB. 18 days OC. 24 days OD. 49 daysarrow_forwardQUESTION 7 The general ledger account for Accounts Receivable shows a debit balance of $25,000. Allowance for Uncollectible Accounts has a credit balance of $1,500. Net sales for the year were $250,000. In the past, 3 percent of sales have proved uncollectible, and an aging of accounts receivable resulted in an estimate of $10,000 of uncollectible accounts receivable. Using the accounts receivable aging method, the Allowance for Uncollectible Accounts balance (after adjustment) would be $11,500 $10,000 $8.500 $10.750arrow_forward
- Page 328 EXERCISE 7.9 Industry Characteristics and Collection Performance e LO7-8 The following information was taken from annual reports of Goodyear Tire & Rubber and PPL Corp.., a public utility: Goodyear PPL Net sales $18.1 billion $ 11.5 billion Average accounts receivable 2.3 billion 923 million a. Compute for each company the accounts receivable turnover rate for the year. b. Compute for each company the average number of days required to collect outstanding receivables (round answers to nearest whole day). c. Explain why the figures computed for Goodyear in parts a and b are so different from those computed for PPL.arrow_forwardAccounts receivable analysis A company reports the following: Sales 3,150,000 Average accounts receivable (net) 210,000 Determine (A) the accounts receivable turnover and (B) the number of days sales in receivables. (Round to one decimal place.)arrow_forwardAccounts receivable turnover and days' sales in receivables For two recent years, Robinhood Company reported the following: 20Y9 20Y8 $8,514,000 $7,134,000 Sales Accounts receivable: Beginning of year 580,000 End of year 650,000 a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round answers to one decimal place. 20Y8: 20Y9: b. Determine the days' sales in receivables for 20Y9 and 20Y8. Use 365 days and round all calculations to one decimal place. days 20Y8: 20Y9: 650,000 640,000 days c. Are the changes in the accounts receivable turnover and days' sales in receivables from 20Y8 to 20Y9 favorable or unfavorable? Favorablearrow_forward
- Question 13 Calculate the average collection period for Roman Inc. if its accounts receivables were $550 at the beginning of a year in which the firm generated $3,000 of sales? OA 61 days OB. 73 days OC. 60 days OD.67 daysarrow_forward8. Company $6,000,000 R had net credit sales of and cost of goods sold of for the year. The Accounts $2,000,000 Receivable balances at the beginning and end of the year were $350,000 and $250,000, respectively. What is the accounts receivable turnover ratio? ● 17.1 times 10.0 times 13.3 times 20.0 timesarrow_forwardQuestion 4 Maple Co. provides for bad debts expense at the rate of 5.72% of ending Accounts Receivable. On Jan 1, 20X1, the Allowance for Bad Debts was $18,000. There were $16,000 of accounts written off during the year. Credit sales for the year were $640,000. Ending Accounts Receivable was $115,000. What is the amount of Bad Debt Expense for the year? Enter your response as a whole number, no commas and no dollar signs. Your Answer:arrow_forward
- QUESTION 31 The financial statements of Danielle Manufacturing Company report net sales of $750,000 and accounts receivable of $60,000 and $90,000 at the beginning and end of the year, respectively. What is the accounts receivable turnover for Danielle? 12.5 times 5 times 10 times 8.3 timesarrow_forwardCalculating the Average Collection Period [LO2] Ortiz Lumber Yard has acurrent accounts receivable balance of $431,287. Credit sales for the year justended were $3,943,709. What is the receivables turnover? The days’ sales inreceivables? How long did it take on average for credit customers to pay off theiraccounts during the past year?arrow_forward25 apped Book The accounts receivable turnover rate for Tiger Uniform has gone from an average of 141 times to 15.6 times per year How has this change affected the firm's accounts receivable period? Multiple Choice Increase of 308 days increase of 249 days Decrease of 328 days Decrease of 198 daysarrow_forward
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