Accounts receivable turnover : Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period. Days’ sales in receivables: Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period. To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

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Answer 1

Question

Chapter 9, Problem 9.6APE

(a)

To determine

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period.

Days’ sales in receivables:

Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period.

To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

(b)

To determine

To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

(c)

To determine

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

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The following data are taken from the financial statements of Colby Company. Accounts receivable (net), end of year Net sales on account Terms for all sales are 1/10, n/45 Accounts Receivable turnover Average collection period (b) 2022 $550,000 2022 2021 4,300,000 4,000,000 7.9 times $540,000 2021 7.5 times 46.2 days 48.7 days What conclusions about the management of accounts receivable can be drawn from the accounts receivable turnover and the average collections period.

Suppose the 2017 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.40 billion at the beginning of the year and $3.54 billion at the end of the year. Compute 3M Company's receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.) times Accounts receivable turnover ratio SHOW LIST OF ACCOUNTS LINK TO TEXT INTERACTIVE TUTORIAL Compute 3M Company's average collection period for accounts receivable in days. (Round answer to 1 decimal place, e.g. 12.5. Use 365 days for calculation.) Average collection period days

Provide Answer with calculation and explanation

Answer 2

Question

Chapter 9, Problem 9.6APE

(a)

To determine

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period.

Days’ sales in receivables:

Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period.

To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

(b)

To determine

To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

(c)

To determine

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

Expert Solution & Answer

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Answer 3

Question

Chapter 9, Problem 9.6APE

(a)

To determine

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period.

Days’ sales in receivables:

Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period.

To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

(b)

To determine

To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

(c)

To determine

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 9.6APE

(a)

To determine

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period.

Days’ sales in receivables:

Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period.

To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

(b)

To determine

To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

(c)

To determine

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 9.6APE

(a)

To determine

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period.

Days’ sales in receivables:

Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period.

To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

(b)

To determine

To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

(c)

To determine

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

Answer 6

Chapter 9, Problem 9.6APE

(a)

To determine

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period.

Days’ sales in receivables:

Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period.

To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

Answer 7

Chapter 9, Problem 9.6APE

(a)

To determine

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the sales by the average amount of net accounts receivables. In other words, average receivable turnover ratio identifies the number of times the average amount of accounts receivables being collected during a particular period.

Days’ sales in receivables:

Days’ sales in receivables indicate the number of days taken by a business, to collect its outstanding amount of accounts receivable on an average. It is otherwise known as average collection period.

To calculate: Company CS’s accounts receivable turnover ratio for 2016and 2015.

Answer 8

(b)

To determine

To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

Answer 9

(b)

To determine

To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

Answer 10

(c)

To determine

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

Answer 11

(c)

To determine

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

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 explains how accounts receivable turnover is calculated by dividing the sales by the average amount of net accounts payable.

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To calculate: Company CS’s days’ sales in receivables for 2016and 2015.

To identify: Whether the change in accounts receivable turnover and the day’s sales in receivables from 2015 to 2016are favorable or unfavorable.

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Chapter 9 Solutions