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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Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

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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.

Expert Solution & Answer

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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.

Expert Solution & Answer

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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 14

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Answer 15

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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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