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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

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Answer 1

Question

Chapter 8, Problem 8.29EX

(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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

(b)

To determine

To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

(c)

To determine

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

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Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600.Self-Employment tax =

Question 2 U. Richards does not keep his books on the double entry system. His bank summary amount for 2010 is as follows: Balance 1.1.2010 1890 Receipts from $44656 debtors Creditors Loan from U. Miller $2.000 Rates Rent Drawings Cash withdrawn from bank $540 0 Payment to Trade $316 95 2750 1316 3095 1642 Sundry Expense Records of cash paid were sundry $122, trade creditors $642. Cash sales amounted to cash drawings were $5289. The following information is also available: 31.12.201 31.12.2 0 011 Cash in hand $48 $93 Trade creditors $4896 $5091 Accounts Receivables 60 $71 13 32 Rent Owing $250 Rates in Advance $282 $312 Motor van (at valuation) 2800 2400 Stock 11163 13021 Required: A. Statement of Affairs. (to find opening capital as at 31.12.2010) B. Cash Account & Bank Account. C. Accounts Receivables & Accounts Payables Control A/Cs. D. Income Statement for the year ended 31 December 2011.

2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600. Self-Employment tax = $ 6,440.70 3: Elisa Grant earns net self-employment income of $198,000. She works a second job from which she receives FICA taxable earnings of $100,400. Self-Employment tax = $ 30,294.00

Answer 2

Question

Chapter 8, Problem 8.29EX

(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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

(b)

To determine

To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

(c)

To determine

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 8.29EX

(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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

(b)

To determine

To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

(c)

To determine

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 8, Problem 8.29EX

(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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

(b)

To determine

To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

(c)

To determine

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.29EX

(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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

(b)

To determine

To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

(c)

To determine

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

Answer 6

Chapter 8, Problem 8.29EX

(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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

Answer 7

Chapter 8, Problem 8.29EX

(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 has been 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 average accounts receivable turnover of Company H and Incorporation L.

Answer 8

(b)

To determine

To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

Answer 9

(b)

To determine

To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

Answer 10

(c)

To determine

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

Answer 11

(c)

To determine

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

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 average accounts receivable turnover of Company H and Incorporation L.

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To identify: Whether Company H or Incorporation L has the higher average accounts receivable turnover ratio.

To explain: The reason for the difference in average accounts receivable turnover ratio between Company H and Incorporation L.

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Chapter 8 Solutions