FUNDAMENTALS OF FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260823875
Author: PHILLIPS
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 8, Problem 5CP
Analyzing Allowance for Doubtful Accounts, Receivables Turnover Ratio, and Days to Collect
Mattel, Inc., and Hasbro are two of the largest and most successful toymakers in the world, in terms of the products they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following information reported in their annual reports (amounts in millions).
Required:
- 1. Calculate the receivables turnover ratios and days to collect for Mattel and Hasbro for 2015 and 2014. (Round your final answers to one decimal place.)
TIP: In your calculations, use average
Accounts Receivable , Net of Allowance. - 2. Which of the companies was quicker to convert its receivables into cash in 2015? in 2014?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Fizzy Sodas and Hayes Companies are two of the largest and most successful beverage companies in the world in terms of the
products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the
following rounded amounts reported in their annual reports (amounts in millions).
Fiscal Year Ended:
Net Sales
Accounts Receivable
Allowance for Doubtful Accounts
Accounts Receivable, Net of Allowance
Req 1
Complete this question by entering your answers in the tabs below.
Req 2A
Required:
1. Calculate the receivables turnover ratios and days to collect for Fizzy Sodas and Hayes Companies for 2018 and 2017.
2-a. Which of the companies was quicker to convert its receivables into cash in 2018?
2-b. Which of the companies was quicker to convert its receivables into cash in 2017?
Req 2B
Receivables Turnover Ratio
Days to collect
2018
2018
$ 40,630
4,410
620
3,790
Fizzy Sodas
Fizzy Sodas
2017
$ 45,120
4,710
610
4,100
Hayes
Companies…
i need the answer quickly
ed
Softee Sodas and Patterson Beverage Company are two of the largest and most successful beverage companies in the world in terms
of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider
the following rounded amounts reported in their annual reports (amounts in millions).
Fiscal Year Ended:
Net Sales
Accounts Receivable
Allowance for Doubtful Accounts
Accounts Receivable, Net of Allowance
2018
$ 35,660
4,130
550
3,580
Softee Sodas
2017
$ 39,520
4,390
540
3,850
Patterson Beverage Company
2016
$ 44,440
4,580
530
4,050
2018
$ 71,440
7,680
100
7,580
2017
$ 72,120
7,590
130
2016
$ 66,660
7,250
140
7,460
7,110
Required:
1. Calculate the receivables turnover ratios and days to collect for Softee Sodas and Patterson Beverage Company for 2018 and 2017.
2-a. Which of the companies was quicker to convert its receivables into cash in 2018?
2-b. Which of the companies was quicker to convert its receivables into cash…
Chapter 8 Solutions
FUNDAMENTALS OF FINANCIAL ACCOUNTING
Ch. 8 - What are the advantages and disadvantages of...Ch. 8 - Prob. 2QCh. 8 - Which basic accounting principles does the...Ch. 8 - Using the allowance method, is Bad Debt Expense...Ch. 8 - What is the effect of the write-off of...Ch. 8 - How does the use of calculated estimates differ...Ch. 8 - A local phone company had a customer who rang up...Ch. 8 - What is the primary difference between accounts...Ch. 8 - What are the three components of the interest...Ch. 8 - As of May 1, 2016, Krispy Kreme Doughnuts had...
Ch. 8 - Does an increase in the receivables turnover ratio...Ch. 8 - What two approaches can managers take to speed up...Ch. 8 - When customers experience economic difficulties,...Ch. 8 - (Supplement 8A) Describe how (and when) the direct...Ch. 8 - (Supplement 8A) Refer to question 7. What amounts...Ch. 8 - 1. When a company using the allowance method...Ch. 8 - 2. When using the allowance method, as Bad Debt...Ch. 8 - 3. For many years, Carefree Company has estimated...Ch. 8 - 4. Which of the following best describes the...Ch. 8 - 5. If the Allowance for Doubtful Accounts opened...Ch. 8 - 6. When an account receivable is recovered a....Ch. 8 - Prob. 7MCCh. 8 - 8. If the receivables turnover ratio decreased...Ch. 8 - Prob. 9MCCh. 8 - Prob. 10MCCh. 8 - Prob. 1MECh. 8 - Evaluating the Decision to Extend Credit Last...Ch. 8 - Reporting Accounts Receivable and Recording...Ch. 8 - Recording Recoveries Using the Allowance Method...Ch. 8 - Recording Write-Offs and Bad Debt Expense Using...Ch. 8 - Determining Financial Statement Effects of...Ch. 8 - Estimating Bad Debts Using the Percentage of...Ch. 8 - Estimating Bad Debts Using the Aging Method Assume...Ch. 8 - Recording Bad Debt Estimates Using the Two...Ch. 8 - Prob. 10MECh. 8 - Prob. 11MECh. 8 - Recording Note Receivable Transactions RecRoom...Ch. 8 - Prob. 13MECh. 8 - Determining the Effects of Credit Policy Changes...Ch. 8 - Prob. 15MECh. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Bad Debt Expense Estimates and...Ch. 8 - Determining Financial Statement Effects of Bad...Ch. 8 - Prob. 3ECh. 8 - Recording Write-Offs and Recoveries Prior to...Ch. 8 - Prob. 5ECh. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Recording and Reporting Allowance for Doubtful...Ch. 8 - Recording and Determining the Effects of Write-Off...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Using Financial Statement Disclosures to Infer...Ch. 8 - Using Financial Statement Disclosures to Infer Bad...Ch. 8 - Prob. 15ECh. 8 - Analyzing and Interpreting Receivables Turnover...Ch. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions Jung ...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions CS...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Prob. 2PBCh. 8 - Prob. 3PBCh. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording and Reporting Credit Sales and Bad Debts...Ch. 8 - Prob. 2COPCh. 8 - Recording Daily and Adjusting Entries Using FIFO...Ch. 8 - Prob. 1SDCCh. 8 - Prob. 2SDCCh. 8 - Ethical Decision Making: A Real-Life Example You...Ch. 8 - Critical Thinking: Analyzing the Impact of Credit...Ch. 8 - Using an Aging Schedule to Estimate Bad Debts and...Ch. 8 - Accounting for Receivables and Uncollectible...
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
- Coca-Cola and PepsiCo are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance Req 1 Req 2A Required: 1. Calculate the receivables turnover ratios and days to collect for Coca-Cola and PepsiCo for 2018 and 2017. 2-a. Which of the companies was quicker to convert its receivables into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables into cash in 2017? Complete this question by entering your answers in the tabs below. Receivables Turnover Ratio Days to collect Req 2B X Answer is complete but not entirely correct. Coca-Cola 2018 $ 31,860 3,890 490 3,400 2018 8.7 x 41.6 PepsiCo Coca-Cola 2017 9.0…arrow_forwardes Fizzy Sodas and Hayes Companies are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 2018 $ 40,630 4,410 620 3,790 Fizzy Sodas 2017 $ 45,120 4,710 610 4,100 2016 $ 47,640 4,930 600 4,330 2018 $ 82,416 8,240 100 8,140 Hayes Companies 2017 $82,945 8,150 130 8,020 Required: 1. Calculate the receivables turnover ratios and days to collect for Fizzy Sodas and Hayes Companies for 2018 and 2017. 2-a. Which of the companies was quicker to convert its receivables into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables into cash in 2017? 2016 $ 71,470 7,770 140 7,630arrow_forwarda) 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.arrow_forward
- Please fill all requirementsarrow_forwardPlease answer fast without plagiarism detectorarrow_forwardThe following select financial statement information from Vortex Computing. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Vortex Computing if industry average for accounts receivable turnover ratio is 4 times and days sales in receivables ratio is 85 days?arrow_forward
- Millennial Manufacturing has net credit sales for 2018 in the amount of $1,433,630, beginning accounts receivable balance of $585,900, and an ending accounts receivable balance of $621,450. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2018 (round answers to two decimal places). What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of days sales ratio is 180 days?arrow_forwardReview the select information for Liquor Plaza and Beer Buddies (industry competitors) and complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places.arrow_forwardAccounts receivable analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): A. Determine the (1) accounts receivable turnover and (2) the number of days sales in receivables for both companies. Round to one decimal place. B. Compare the two companies with regard to their credit card policies.arrow_forward
- Review the select information for Bean Superstore and Legumes Plus (industry competitors), and then complete the following. A. Compute the accounts receivable turnover ratios for each company for 2018 and 2019. B. Compute the number of days sales in receivables ratios for each company for 2018 and 2019. C. Determine which company is the better investment and why. Round answers to two decimal places.arrow_forwardPlease don't give image formatarrow_forwardA company regularly sells its receivables to a factor who assesses a 2% service charge on the amount of receivables purchased. Which of the following statements is true for the seller of the receivables? The credit to Accounts Receivable is less than the debit to Cash when the accounts are sold. Selling expenses will increase each time accounts are sold. The other expense section of the income statement will increase each time accounts are sold. The loss section of the income statement will increase each time receivables are sold.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License