Accounts Receivable : It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account. Accounts Receivable Turnover: It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable. 1. To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

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Answer 1

Question

Chapter 7, Problem 2AA

To determine

Accounts Receivable:

It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Accounts Receivable Turnover:

It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable.

1.

To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

2.

To determine

To compute: Collection period of accounts receivable for company A and G.

3.

To determine

To explain: If Company A is more efficient in collecting its receivables or Company G.

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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.

Comparative figures for Apple and Google follow. Apple $ millions Accounts receivable, net Net sales Current Year $ 22,926 260,174 One Year Prior $ 23,186 265,595 Two Years Prior $ 17,874 229,234 Current Year $ 25,326 161,857 Required: Google One Year Prior $ 20,838 136,819 Two Years Prior $ 18,336 110,855 1. Compute the accounts receivable turnover for the two most recent years for (a) Apple and (b) Google. 2. Which company more quickly collects its accounts receivable in the current year? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the accounts receivable turnover for the two most recent years for (a) Apple and (b) Google. Note: Round your answers to 1 decimal place. Accounts Receivable Turnover Current Year Prior Year a. Apple b. Google times times times times

If 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 Analysis

Answer 2

Question

Chapter 7, Problem 2AA

To determine

Accounts Receivable:

It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Accounts Receivable Turnover:

It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable.

1.

To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

2.

To determine

To compute: Collection period of accounts receivable for company A and G.

3.

To determine

To explain: If Company A is more efficient in collecting its receivables or Company G.

Expert Solution & Answer

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Answer 3

Question

Chapter 7, Problem 2AA

To determine

Accounts Receivable:

It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Accounts Receivable Turnover:

It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable.

1.

To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

2.

To determine

To compute: Collection period of accounts receivable for company A and G.

3.

To determine

To explain: If Company A is more efficient in collecting its receivables or Company G.

Expert Solution & Answer

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Answer 4

Question

Chapter 7, Problem 2AA

To determine

Accounts Receivable:

It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Accounts Receivable Turnover:

It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable.

1.

To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

2.

To determine

To compute: Collection period of accounts receivable for company A and G.

3.

To determine

To explain: If Company A is more efficient in collecting its receivables or Company G.

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 2AA

To determine

Accounts Receivable:

It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Accounts Receivable Turnover:

It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable.

1.

To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

2.

To determine

To compute: Collection period of accounts receivable for company A and G.

3.

To determine

To explain: If Company A is more efficient in collecting its receivables or Company G.

Answer 6

Chapter 7, Problem 2AA

To determine

Accounts Receivable:

It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Accounts Receivable Turnover:

It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable.

1.

To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

Answer 7

Chapter 7, Problem 2AA

To determine

Accounts Receivable:

It refers to the amount that is to be received by a company for providing goods and services on credit. It is an asset account.

Accounts Receivable Turnover:

It refers to the ratio between net sales and average accounts receivable which determines the amount of net sales in multiple of average accounts receivable to ensure the quality of recovery and liquidity of accounts receivable.

1.

To compute: Accounts receivable turnover for A and G Company for each of the two most recent years.

Answer 8

2.

To determine

To compute: Collection period of accounts receivable for company A and G.

Answer 9

2.

To determine

To compute: Collection period of accounts receivable for company A and G.

Answer 10

3.

To determine

To explain: If Company A is more efficient in collecting its receivables or Company G.

Answer 11

3.

To determine

To explain: If Company A is more efficient in collecting its receivables or Company G.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 7 - Prob. 1MCQ Ch. 7 - Prob. 2MCQ Ch. 7 - Prob. 3MCQ Ch. 7 - Prob. 4MCQ Ch. 7 - Prob. 5MCQ Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - Prob. 3DQ Ch. 7 - Prob. 4DQ Ch. 7 - Prob. 5DQ

Solution Summary: The author explains the ratio between net sales and average accounts receivable.

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To compute: Collection period of accounts receivable for company A and G.

To explain: If Company A is more efficient in collecting its receivables or Company G.

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Chapter 7 Solutions