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 accounts receivable turnover for Year 1 and Year 2.

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Answer 1

Question

Chapter 8, Problem 8.3ADM

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 accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Accounts Receivable Turnover and Days' Sales in Receivables Classic Company designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company's products include such brands as Polo by Classic, Classic Purple Label, Classic, Polo Jeans Co., and Chaps. Polo Classic reported the following for two recent years: For the Period Ending Sales $7,408,770 715,400 Accounts receivable Assume that accounts receivable were $657,000 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round your answers to two decimal places. Year 2: Year 1: Year 2 Year 2: Year 1 Year 1: $7,320,075 737,300 b. Compute the days' sales in receivables for Year 2 and Year 1. Round your final answers to one decimal place. Use 365 days per year in your calculations. days days

Use the following to answer questions 6 – 7 MC, Inc., reported the following amounts at the end of the year: Total sales $888,000 Accounts receivable Sales allowances 60,000 3,500 Allowance for Uncollectible accounts 1,400 Sales discounts 18,000 9,000 Sales returns Determine total contra revenues for $ the company 6. 7. $ Determine net sales for the company

eBook Show Me How Print Item Accounts Receivable Analysis A company reports the following: Sales $531,440 Average accounts receivable (net) 20,440 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

Answer 2

Question

Chapter 8, Problem 8.3ADM

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 accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Answer 3

Question

Chapter 8, Problem 8.3ADM

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 accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Answer 4

Question

Chapter 8, Problem 8.3ADM

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 accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Answer 5

Chapter 8, Problem 8.3ADM

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 accounts receivable turnover for Year 1 and Year 2.

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

Answer 6

Chapter 8, Problem 8.3ADM

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 accounts receivable turnover for Year 1 and Year 2.

Answer 7

Chapter 8, Problem 8.3ADM

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 accounts receivable turnover for Year 1 and Year 2.

Answer 8

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

Answer 9

B.

To determine

To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

Answer 10

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

Answer 11

C.

To determine

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

Answer 12

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Answer 15

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Solution Summary: The author explains accounts receivable turnover, which is calculated by dividing the net credit sales by the average amount of net accounts.

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To calculate: The day’s sales in receivables at the end of Year 1 and Year 2.

To conclude: The Efficiency of Incorporation L’s management in collecting accounts receivables.

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Chapter 8 Solutions