### Financial Analysis ProblemThe financial statements of the **Sheffield Corp.** report net sales of **$690,150** and accounts receivable of **$98,000** and **$31,000** at the beginning of the year and end of year, respectively. **What is the accounts receivable turnover for Sheffield Corp.?**#### Options:- ( ) 22.3 times- ( ) 5.4 times- ( ) 7.0 times- ( ) 10.7 times### Explanation:The accounts receivable turnover ratio is a measure used to quantify a firm's effectiveness in collecting its receivables. It is computed using the following formula:\[ \text{Accounts Receivable Turnover} = \frac{\text{Net Sales}}{\text{Average Accounts Receivable}} \]Where:- **Net Sales**: Total revenue from sales after returns and discounts.- **Average Accounts Receivable**: The average of accounts receivable balances at the beginning and end of the period.For Sheffield Corp.:- **Net Sales** = $690,150- **Beginning Accounts Receivable** = $98,000- **Ending Accounts Receivable** = $31,000- **Average Accounts Receivable** = $\frac{98,000 + 31,000}{2} = 64,500$Plug these values into the formula:\[ \text{Accounts Receivable Turnover} = \frac{690,150}{64,500} \approx 10.7 \]Thus, the correct answer is:- ( ) 22.3 times- ( ) 5.4 times- ( ) 7.0 times- (X) 10.7 times

Accounts receivable turnover ratio is computed to determine the efficiency of the entity to collect…

The financial statements of the Sheffield Corp. reports net sales of $690150 and accounts receivable of $98000 and $31000 at the beginning of the year and end of year, respectively. What is the accounts receivable turnover for Sheffield Corp.? O 22.3 times O 5.4 times O 7.0 times O 10.7 times

The financial statements of the Sheffield Corp. reports net sales of $690150 and accounts receivable of $98000 and $31000 at the beginning of the year and end of year, respectively. What is the accounts receivable turnover for Sheffield Corp.? O 22.3 times O 5.4 times O 7.0 times O 10.7 times

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The financial statements of the Novak Corp. report net sales of $300000 and accounts receivable of $55200 and $27600 at the beginning of the year and the end of the year, respectively. What is the average collection period for accounts receivable in days? (Use 365 days for calculation.)
A company reports the following: Sales $890,600 Average accounts receivable (net) 44,530 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover 20 b. Number of days' sales in receivables 18 X days
The following data are taken from the financial statements of Colby Company. Accounts receivable (net), end of year Net sales on account Terms for all sales are 1/10, n/45 Accounts Receivable turnover Average collection period (b) 2022 $550,000 2022 2021 4,300,000 4,000,000 7.9 times $540,000 2021 7.5 times 46.2 days 48.7 days What conclusions about the management of accounts receivable can be drawn from the accounts receivable turnover and the average collections period.
Accounts Receivable Analysis The following data are taken from the financial statements of Basinger Inc. Terms of all sales are 2/10, n/45. 20Y3 20Y2 20Y1 Accounts receivable, end of year $171,400 $179,000 $186,000 Sales on account 1,068,720 1,003,750 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Y3 20Y2 1. Accounts receivable turnover fill in the blank 1 fill in the blank 2 2. Number of days' sales in receivables fill in the blank 3 days fill in the blank 4 days b. The collection of accounts receivable has . This can be seen in both the in accounts receivable turnover and the in the collection period.
The Nicholas Company had net sales on account of $6,570,000 during 1998. The beginning and ending accounts receivable were $475,000 and 535,000 respectively. Compute the accounts receivable turnover ratio.
The financial statements of Bolero Manufacturing Inc. report net credit sales of $900,000 and accounts receivable of S80,000 and $40,000 at the beginning of the year and end of the year, respectively. What is the average collection period for accounts receivable in days (rounded)? O 49 days O 16 days 24 days 32 days
A company reports the following: Sales $1,460,000 Average accounts receivable (net) 100,000 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover fill in the blank 1 b. Number of days' sales in receivables fill in the blank 2 days
Accounts Receivable Turnover and Average Collection Period The Forrester Corporation disclosed the following financial information (in millions) in its recent annual report: Net Sales Beginning Accounts Receivable (net) Ending Accounts Receivable (net) Previous Year Current Year $67,096 3,896 3,696 $81,662 3,696 3,598 a. Calculate the accounts receivable turnover ratio for both years. (Round your answer to two decimal points.) b. Calculate the average collection period for both years. (Use 365 days for calculation. Round to the nearest whole number.) c. Is the company's accounts receivable management improving or deteriorating? a. Accounts receivable turnover b. Average collection period Previous Year 17.7 x Current Year 22.4 x 21▾ 16 c. The company's receivable management Improved Check
heridan Company had net credit sales during the year of $1047750 and cost of goods sold of $484000. The balance in accounts receivable at the beginning of the year was $110400 and at the end of the year was $143600. What was the accounts receivable turnover?
Accounts Receivable Analysis The following data are taken from the financial statements of Basinger Inc. Terms of all sales are 2/10, n/45. 20Y3 20Y2 20Y1 Accounts receivable, end of year $157,200 $164,000 $171,800 Sales on account 883,300 789,130 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Y3 20Y2 1. Accounts receivable turnover 2. Number of days' sales in receivables days days This can be seen in both the in accounts receivable b. The collection of accounts receivable has turnover and the in the collection period.
The following data are taken from the financial statements of Sigmon Inc. Accounts receivable, end of year Sales on account 20Y2 $182,600 $197,000 1,043,900 1,001,560 20Y3 1. Accounts receivable turnover For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round answers to one decimal place. Assume a 365-day year. 20Y2 2. Number of days' sales in receivables 20Y1 20Y3 $211,800 Days Days
Twist Corp. has a current accounts receivable balance of $438,726. Credit sales for the year just ended were $3,830,500. What is the receivables turnover?