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.
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.
Solution Summary: The author explains accounts receivable turnover, which is calculated by dividing the net credit sales by the average amount of net accounts.
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
Chapter 9, Problem 9.4CP
(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 A’s management in collecting accounts receivables.
Jasper Company's output for the current period was assigned a $225,000 standard direct materials cost. The direct materials variances included a $15,500 favorable price variance and a $3,200 favorable quantity variance. What is the actual total direct materials cost for the current period? Provide answer
Maxwell Corp., which began business at the start of the current year, had the following data: The company planned and actually produced 50,000 units. It sold 47,000 units at a price of $18 per unit. The production costs included a variable cost of $6 per unit and total fixed costs of $300,000. Selling and administrative costs consisted of a variable cost of $2 per unit and fixed costs of $40,000. What is the gross margin that the company would disclose on an absorption-costing income statement?
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