Honda Motor Co., Ltd. is preparing its year-end financial statements and needs to calculate its accounts receivable turnover ratio and average collection period. The company's credit sales for the year amounted to ¥15 trillion. Honda's accounts receivable balance at the beginning of the year was ¥1.2 trillion, and at the end of the year, it was ¥1.4 trillion. Assume there are 365 days in the year. What is Honda's accounts receivable turnover ratio for the year? What is the company's average collection period in days? Round your answers to two decimal places. Siemens AG, a multinational conglomerate company, is considering adopting the Last-In, First-Out (LIFO) inventory valuation method for its manufacturing division. The company's CFO believes that LIFO might provide a more accurate representation of the current cost of goods sold in their financial statements, especially given the recent inflationary pressures in the raw materials market. However, some members of the accounting team are concerned about the potential impact on the company's reported profits and tax liability. They also worry about the compatibility of LIFO with International Financial Reporting Standards (IFRS), as Siemens operates globally. The CFO has asked you to prepare a brief analysis of the pros and cons of adopting LIFO for Siemens AG. What are the key factors Siemens should consider in this decision, and what recommendation would you make based on these factors?
Honda Motor Co., Ltd. is preparing its year-end financial statements and needs to calculate its accounts receivable turnover ratio and average collection period. The company's credit sales for the year amounted to ¥15 trillion. Honda's accounts receivable balance at the beginning of the year was ¥1.2 trillion, and at the end of the year, it was ¥1.4 trillion. Assume there are 365 days in the year. What is Honda's accounts receivable turnover ratio for the year? What is the company's average collection period in days? Round your answers to two decimal places. Siemens AG, a multinational conglomerate company, is considering adopting the Last-In, First-Out (LIFO) inventory valuation method for its manufacturing division. The company's CFO believes that LIFO might provide a more accurate representation of the current cost of goods sold in their financial statements, especially given the recent inflationary pressures in the raw materials market. However, some members of the accounting team are concerned about the potential impact on the company's reported profits and tax liability. They also worry about the compatibility of LIFO with International Financial Reporting Standards (IFRS), as Siemens operates globally. The CFO has asked you to prepare a brief analysis of the pros and cons of adopting LIFO for Siemens AG. What are the key factors Siemens should consider in this decision, and what recommendation would you make based on these factors?
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 10EA: Millennial Manufacturing has net credit sales for 2018 in the amount of $1,433,630, beginning...
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Transcribed Image Text:Honda Motor Co., Ltd. is preparing its year-end financial statements
and needs to calculate its accounts receivable turnover ratio and
average collection period. The company's credit sales for the year
amounted to ¥15 trillion. Honda's accounts receivable balance at the
beginning of the year was ¥1.2 trillion, and at the end of the year, it
was ¥1.4 trillion. Assume there are 365 days in the year. What is
Honda's accounts receivable turnover ratio for the year? What is the
company's average collection period in days? Round your answers to
two decimal places. Siemens AG, a multinational conglomerate
company, is considering adopting the Last-In, First-Out (LIFO)
inventory valuation method for its manufacturing division. The
company's CFO believes that LIFO might provide a more accurate
representation of the current cost of goods sold in their financial
statements, especially given the recent inflationary pressures in the
raw materials market. However, some members of the accounting
team are concerned about the potential impact on the company's
reported profits and tax liability. They also worry about the
compatibility of LIFO with International Financial Reporting Standards
(IFRS), as Siemens operates globally. The CFO has asked you to prepare
a brief analysis of the pros and cons of adopting LIFO for Siemens AG.
What are the key factors Siemens should consider in this decision, and
what recommendation would you make based on these factors?
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