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 Corporation RL and Incorporation L.

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Answer 1

Question

Chapter 8, Problem 8.4ADM

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 Corporation RL and Incorporation L.

B.

To determine

To identify: Whether Corporation RL 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 Corporation RL and Incorporation L.

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Use the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of the Campbell Soup Company and American Eagle Outfitters, Inc.a. Compute the average accounts receivable turnover ratio for Campbell Soup and American Eagle for the years shown in Exercises 9-27 (See attachment) and 9-28 (See attachment).b. Does Campbelll Soup or American Eagle have the higher average accounts receivable turnover ratio?c. Explain why the average turnover ratios are different in (b).

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

The following data are taken from or calculated from the financial statements: Average accounts receivable (net) Sales on account a. Assuming that credit terms on all sales are n/45, determine for each year (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round intermediate calculations to whole numbers and final answers to two decimal places. 1. The accounts receivable turnover: Current Year Preceding Year 2. The number of days' sales in receivables: Assume a 365-day year. Current Year days Current Year Preceding Year $123,000 950,000 $95,000 825,000 Preceding Year days b. Comment on any significant trends revealed by the data. Sales during the current year, indicating a(n) trend. The accounts receivable turnover has collected within the 45-day period. Likewise, the number of days' sales in receivables indicates a(n) . Based on credit terms of n/45, the current year turnover indicates that trend. receivables are not being

Answer 2

Question

Chapter 8, Problem 8.4ADM

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 Corporation RL and Incorporation L.

B.

To determine

To identify: Whether Corporation RL 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 Corporation RL and Incorporation L.

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Answer 3

Question

Chapter 8, Problem 8.4ADM

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 Corporation RL and Incorporation L.

B.

To determine

To identify: Whether Corporation RL 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 Corporation RL and Incorporation L.

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Answer 4

Question

Chapter 8, Problem 8.4ADM

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 Corporation RL and Incorporation L.

B.

To determine

To identify: Whether Corporation RL 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 Corporation RL and Incorporation L.

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Answer 5

Chapter 8, Problem 8.4ADM

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 Corporation RL and Incorporation L.

B.

To determine

To identify: Whether Corporation RL 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 Corporation RL and Incorporation L.

Answer 6

Chapter 8, Problem 8.4ADM

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 Corporation RL and Incorporation L.

Answer 7

Chapter 8, Problem 8.4ADM

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 Corporation RL and Incorporation L.

Answer 8

B.

To determine

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

Answer 9

B.

To determine

To identify: Whether Corporation RL 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 Corporation RL and Incorporation L.

Answer 11

C.

To determine

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

Answer 12

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Answer 13

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Answer 15

Ch. 8 - What are the three classifications of receivables?Ch. 8 - Dans Hardware is a small hardware store in the...Ch. 8 - What kind of an account (asset, liability, etc.)...Ch. 8 - After the accounts are adjusted and closed at the...Ch. 8 - A firm has consistently adjusted its allowance...Ch. 8 - Which of the two methods of estimating...Ch. 8 - Neptune Company issued a note receivable to...Ch. 8 - Prob. 8DQ Ch. 8 - The maker of a 240,000, 6%, 90-day note receivable...Ch. 8 - Prob. 10DQ

Solution Summary: The author calculates the average accounts receivable turnover of Corporation RL and Incorporation L.

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To identify: Whether Corporation RL 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 Corporation RL and Incorporation L.

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