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 other words, 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 of Company B for the year 2017.

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Answer 1

Question

Chapter 8, Problem 8.4DIE

(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 other words, 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 of Company B for the year 2017.

(b)

To determine

To calculate: The average collection period of Company B for the year 2017.

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Wilson Corporation acquires Greatbatch Company for $80 million cash in a merger. The balance sheets of both companies at the date of acquisition are as follows: Balance Sheet (in millions) Wilson Greatbatch Current assets $96 $8 Property and equipment 800 144 Intangibles 32 4.8 Total assets $928 $156.8 Current liabilities $40 $3.2 Long-term debt 640 104 Capital stock 80 19.2 Retained earnings 192 24 Accumulated other comprehensive income (loss) (24) 6.4 Total liabilities and equity $928 $156.8 Greatbatch's property and equipment is overvalued by $48 million, its reported intangibles are undervalued by $32 million, and it has unreported intangibles, in the form of customer databases and marketing agreements, valued at $11.2 million. Required Prepare Wilson's balance sheet immediately following the merger. Use a negative sign with your answer for AOCI if the balance is a loss.

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Answer 2

Question

Chapter 8, Problem 8.4DIE

(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 other words, 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 of Company B for the year 2017.

(b)

To determine

To calculate: The average collection period of Company B for the year 2017.

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Answer 3

Question

Chapter 8, Problem 8.4DIE

(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 other words, 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 of Company B for the year 2017.

(b)

To determine

To calculate: The average collection period of Company B for the year 2017.

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Answer 4

Question

Chapter 8, Problem 8.4DIE

(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 other words, 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 of Company B for the year 2017.

(b)

To determine

To calculate: The average collection period of Company B for the year 2017.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.4DIE

(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 other words, 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 of Company B for the year 2017.

(b)

To determine

To calculate: The average collection period of Company B for the year 2017.

Answer 6

Chapter 8, Problem 8.4DIE

(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 other words, 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 of Company B for the year 2017.

Answer 7

Chapter 8, Problem 8.4DIE

(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 other words, 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 of Company B for the year 2017.

Answer 8

(b)

To determine

To calculate: The average collection period of Company B for the year 2017.

Answer 9

(b)

To determine

To calculate: The average collection period of Company B for the year 2017.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author calculates the accounts receivable turnover ratio of Company B for the year 2017.

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To calculate: The average collection period of Company B for the year 2017.

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