Ally Corp's days sales in receivables is 35. The industry average days sales in receivables is 41. Which of the following is CORRECT?O a. The firm sells its entire inventory every 35 days.b. It takes an average of 35 days for the firm to collect cash from its sales.O c. The firm is not as effective as an average firm in the industry in managing its assets.O d. Other firms in the industry collect sales at a much faster rate than the firm.A Moving to another question will save this response

Days Sales in Receivables (DSR) is a financial metric that measures the average number of days a…

Answered: Ally Corp's days sales in receivables…

Ally Corp's days sales in receivables is 35. The industry average days sales in receivables is 41. Which of the following is CORRECT?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Compute (a) accounts receivable turnover and (b) days' sales uncollected. H

A: Accounts Receivable Turnover :— It is the ratio between net sales and average accounts receivable.…

Q: Additional information and adjustments as at 30 September 2019: 1. The stock take revealed the…

A: Adjustment entries: Cost of Sales Dr. 13,640 To Trading…

Q: On December 31, 2011, Wesam Company had a $60,275 balance in Accounts Receivable. During the year…

A: Sales on account can be determined by adding the beginning balance of accounts receivable to the…

Q: A firm had credit sales of $15,750,000 last year and its days sales outstanding was 65 days. What…

A: Given, Credit sales = $15,750,000. Days sales outstanding = 65 days.

Q: Recent financial statements of General Mills, Inc. report net sales of $12,734,750,000. Accounts…

A: The ratio analysis helps to analyze the financial statements of the business on the basis of the…

Q: Discover reported $431,818 in net sales and $31,677 in accounts receivable for the current period.…

A: When the sales are made on an account that no cash is collected then it means sales are made on…

Q: If Emperium Inc. had credit sales of 2,027,773 per year and its days sales outstanding was equal to…

A: Days Sales or Receivables Outstanding means the number of days it takes a company to realize cash…

Q: ed Softee Sodas and Patterson Beverage Company are two of the largest and most successful beverage…

A: Step 1: The receivables turnover ratio can be calculated by dividing the Net sales by the Average…

Q: Need help

A: We calculate Tamarisk's average net accounts receivable by using the formula:Accounts Receivable…

Q: A firm has $400,000 in credit sales and $100,000 in accounts receivable.Compute accounts receivable…

Q: 10. Review the select information for Bean Superstore and Legumes Plus (industry competitors), and…

A: Accounts Receivable Turnover Ratio: Accounts Receivable Turnover Ratio measures how many times a…

Q: Assuming 77 percent of sales are on credit, what is the company's days' sales in receivables?

A: Information Provided: Net Income = $191,000 Profit Margin = 9.10% Accounts Receivable = $106,919…

Q: Los Altos, Inc. has an accounts receivable turnover of 20. What is the company's average collection…

A: Formula: Average collection period = 365 days / Accounts receivable turnover. Division of 365 days…

Q: Your company has net sales of $468,300 and average net receivables of $111,500 for the year. Which…

A: Step 1 Receivables Turnover Ratio =Net Sales / Average Accounts Receivables Average days to collect=…

Q: A firm had credit sales of $15,750,000 last year and its days sales outstanding was 65 days. What…

A: Days Sales Outstanding (DSO) is the measure the average number of days a business to receive…

Q: Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The…

A: Allowance for doubtful accounts means where we expect some debts to become bad in near future then…

Q: Analyz JReceivables The following information was taken from the annual reports of two high- end…

A: Solution: Part A) Net Credit Revenue / Accounts Receivable = Receivable Turnover Ratio Company A…

Q: he following data are for Rocky Company. Current Year 1 Year Ago Accounts receivable, net $…

A: Accounts Receivable Turnover -Accounts Receivable Turnover Ratio Is a Measures The Number Of Times…

Q: Smart and Smiley Incorporated has an average collection period of 74 days. What is the accounts…

A: Accounts receivable turnover ratio refers to the ratio which describes the period which is consumed…

Q: Barga Company's net sales for Year 1 and Year 2 are $661,000 and $745,000, respectively. Its…

A: Days Sales Uncollected: It is possible to anticipate the number of days that will pass until…

Q: The following data are taken from the financial statements of Sheffield Company. Accounts receivable…

A: As per the given information: 20222021Accounts receivable (net), end of year$555,000$470,000Net…

Q: A firm has $375,000 in credit sales and $135,000 in accounts receivable. Compute the average number…

A: Average number of collection days = 365 days / Average receivable turnover ratio Average receivable…

Q: accounts receivable turno ratio of a company is 2, annual credit sales IS $ nat is the average…

A: Given, Accounts receivable turnover = 2 Annual credit sales = $719550

Q: y has net sales of 1,630,200 an

A: The accounts receivable turnover ratio, also known as the debtor’s turnover ratio, is an…

Q: Bulldogs Inc. had credit sales last year amounted to P18,600,000. The firm also had an average…

A: Solution.. Credit sales = P18,600,000 Average accounts receivable = P1,380,000 Average collection…

Q: What is the receivales turnover and what is the average collection period (days sales outstanding) ?

A: Information Provided: Credit sales = $10,640,000 Receivables = $1,520,000

Q: A company reports the following: Sales $315,360 Average accounts receivable (net) 39,420 Determine…

A: Accounts receivable turnover = ( Net Credit Sales / Average Accounts receivable ) Number of days'…

Q: A company has net income of $184,000, a profit margin of 8.5 percent, and an accounts receivable…

A: Profit margin=Net income/SalesHence sales=(184000/0.085)=$2164705.88

Q: TMRW Co. has annual credit sales of $1,080,000 and an average collection period of 32 days in 2010.…

A: 1. TMRW Co.- Average accounts receivable balance = (Annual Credit Sales / 360 days) x Average…

Q: During 2014, SABA Company had net sales of $11,400,000. Most of the sales were on credit. At the end…

A: Journal Entry Date Accounts Debit Credit 2014 Bad Debt Expenses Dr.…

Q: Bulldogs Inc. had credit sales last year amounted to P18,600,000. The firm also had an average…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: An analyst has obtained the following information regarding ABC, Inc. Using this information, he…

A: Operating cycle is calculated as below: Now, Cash conversion cycle (CCC) will determine Days…

Q: Softee Sodas and Patterson Beverage Company are two of the largest and most successful beverage…

Q: The Nicholas Company had net sales on account of $6,570,000 during 1998. The beginning and ending…

A: Given the following information: Net credit sales: $6,570,000 Beginning accounts receivables:…

Q: Lipovetsky Corp. has the following data relating to accounts receivable at the end of the current…

A: The net realizable value for accounts receivable is calculated as gross account receivables minus…

Q: Michaels Corp. has a current accounts receivable balance of $623,410. Credit sales for the year just…

A: Introduction: Accounts receivable turnover is the number of times a year that a business pays its…

Q: Rayne Company reported Net sales of $1,300,000 and average Accounts Receivable, net of $78,500. The…

A: Average Accounts Receivable :— It is calculated by dividing sum of beginning and ending balance of…

Q: Q6. Pujols Lumber Yard has a current accounts receivable balance of $394,539. Credit sales for the…

A: First, find the receivable turnover ratio ( RTOR) = Credit Sales / Accounts receivable Given credit…

Q: Watin Inc's 2015 income statement reported net sales of $5,000,000. Watin's average accounts…

A: We have the following information: Net Sales: $5,000,000 Average account receivables: $450,000 Days…

Q: Trout Lumber Yard has a current accounts receivable balance of $440,516. Credit sales for the year…

A: Receivables turnover = Credit sales / Receivables Days' sales in receivables = 365 days /…

Q: 4. The following select financial statement information from Hogge Computing. Compute the accounts…

A: The accounts receivable turnover ratio is a financial metric that measures how efficiently a company…

Q: Blue Air Inc., has net sales of $735,000 and accounts receivables of $164,000. What are the firm's…

A: Accounts Receivables Turnover Ratio measures the efficiency of the company in collecting receivables…

Q: Berry Farms has an accounts receivable balance at the end of 2018 of $425,650. The net credit sales…

A: Accounts receivables are accounts of those customers to whom business has made credit sales on…

Q: Twist Corporation has a current accounts receivable balance of $357,615. Sales for the year just…

A: Days sales in receivable is calculated by dividing the number of days in a year by receivable…

Question

Ally Corp's days sales in receivables is 35. The industry average days sales in receivables is 41. Which of the following is CORRECT?
O a. The firm sells its entire inventory every 35 days.
b. It takes an average of 35 days for the firm to collect cash from its sales.
O c. The firm is not as effective as an average firm in the industry in managing its assets.
O d. Other firms in the industry collect sales at a much faster rate than the firm.
A Moving to another question will save this response

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction to Days in Sales Receivables

VIEW

Step 2: Explanation for correct option

VIEW

Step 3: Explanation for incorrect option

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Flying Tigers, Inc., has net sales of $762,000 and accounts receivables of $154,000. What is the firm's accounts receivables turnover? (Give your answer up to two decimal places)
Suppose the 2022 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.2 billion at the beginning of the year and $3.25 billion at the end of the year. Compute 3M’s accounts receivable turnover. - Accounts Recievable turnover ratio=? (times) Compute 3M’s average collection period for accounts receivable in days - Average collection period =? (days)
None
The financial statements of the Sunland Company report net sales of $384000 and accounts receivable of $50400 and $33600 at the beginning of the year and the end of the year, respectively. What is the average collection period for accounts receivable in days?
Marbel had $4,448 million in sales and $1,218 million in ending accounts receivable for the current period. For the same period, Maxtel reported $5,703 million in sales and $1,145 million in ending accounts receivable. Calculate the days’ sales uncollected for both companies as of the end of the current period. Marbel Maxtel Which company is doing a better job in managing the collection of its receivables?
The Moraine Company has net income of $167,850. There are currently 32.65 days' sales in receivables. Total assets are $856,000, total receivables are $148,100, and the debt-equity ratio is .65. a. What is the company's profit margin? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the company's total asset turnover? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What is the company's ROE? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Profit margin b. Total asset turnover c. ROE % times %
Activity measures: m. Calculate the accounts receivable turnover and number of days' sales in accounts receivable (based on a 365-day year) for the most recent year. n. Based on your analysis in m, do you believe that the company is doing an effective job at managing accounts receivable? What would you estimate the industry averages to be for the accounts receivable turnover and number of days' sales in accounts receivable? Explain. o. Calculate the inventory turnover and number of days' sales in inventory (based on a 365-day year) for the most recent year. p. Based on your analysis in o, to what extent does the company need to be concerned about its inventory management policies? In assessing the inventory management policies, would you be more interested in knowing current ratio or acid-test ratio information? Explain.
a) 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.
19. The accounts receivable turnover is 8.14, and average net accounts receivable during the period is $400,000. What is the amount of net credit sales for the period? Brief Exercises Identify different types of receivables. BE8.1 (LO 1), C The following are three receivables transactions. Indicate whether these receivables are reported as accounts receivable, notes receivable, or other receivables on a balan a. Sold merchandise on account for $64,000 to a customer. b. Received a promissory note of $57,000 for services performed. c. Advanced $10,000 to an employee. Record basic accounts receivable transactions. PEO AR Rooord the following transactions on the books of Jarvis Co. (Omit cost of goods sold entries.)
1. A company, extends credit to its customers. Total Sales is 2 Million, credit Sales is 850,000, Sales Return is 305,000, with percent of uncollectibility set at 4% What is the journal entry under percentage of net credit sales?
IBM had net sales of $81,741 and average accounts receivable of $8,712. Its competitor, Oracle, had net sales of $38,226 and average accounts receivables of $5,618. Calculate the accounts receivable turnover for both companies. IBM: Oracle: Which company is doing a better job of managing its accounts receivables?
Dahlia Corporation has a current accounts receivable balance of $329,800. Credit sales for the year just ended were $4,369,850. a. What is the company's receivables turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the company's days' sales in receivables? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Receivables turnover b. Days' sales in receivables c. Average collection period times days days