Accounts receivable turnover Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period. Average collection period: Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average. To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

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Answer 1

Question

Chapter 8, Problem 8.1EYCT

(a)

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

(b)

To determine

To identify: whether Incorporation A has any potentially significant credit risks in 2014.

(c)

To determine

To conclude: The information from part (a) and (b).

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Answer 2

Question

Chapter 8, Problem 8.1EYCT

(a)

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

(b)

To determine

To identify: whether Incorporation A has any potentially significant credit risks in 2014.

(c)

To determine

To conclude: The information from part (a) and (b).

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Answer 3

Question

Chapter 8, Problem 8.1EYCT

(a)

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

(b)

To determine

To identify: whether Incorporation A has any potentially significant credit risks in 2014.

(c)

To determine

To conclude: The information from part (a) and (b).

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Answer 4

Question

Chapter 8, Problem 8.1EYCT

(a)

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

(b)

To determine

To identify: whether Incorporation A has any potentially significant credit risks in 2014.

(c)

To determine

To conclude: The information from part (a) and (b).

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Answer 5

Chapter 8, Problem 8.1EYCT

(a)

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

(b)

To determine

To identify: whether Incorporation A has any potentially significant credit risks in 2014.

(c)

To determine

To conclude: The information from part (a) and (b).

Answer 6

Chapter 8, Problem 8.1EYCT

(a)

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

Answer 7

Chapter 8, Problem 8.1EYCT

(a)

To determine

Accounts receivable turnover

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In simple, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

Average collection period:

Average collection period indicates the number of days taken by a business to collect its outstanding amount of accounts receivable on an average.

To calculate: The accounts receivable turnover and average collection period for 2014 for Incorporation A.

Answer 8

(b)

To determine

To identify: whether Incorporation A has any potentially significant credit risks in 2014.

Answer 9

(b)

To determine

To identify: whether Incorporation A has any potentially significant credit risks in 2014.

Answer 10

(c)

To determine

To conclude: The information from part (a) and (b).

Answer 11

(c)

To determine

To conclude: The information from part (a) and (b).

Answer 12

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Answer 13

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Answer 14

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Answer 15

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Solution Summary: The author calculates the accounts receivable turnover and average collection period for Incorporation A.

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To identify: whether Incorporation A has any potentially significant credit risks in 2014.

To conclude: The information from part (a) and (b).

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