Question
In: Accounting
Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year.
Accounts Receivable Analysis A company reports the following:
Net sales $1,272,390
Average accounts receivable (net) 60,590
Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year.
a. Accounts receivable turnover
b. Number of days' sales in receivables days
Solutions
Expert Solution
The number of times a firm may sell its merchandise and collect payment from creditors is determined by its account receivable turnover ratio. The credit sales to average account receivable ratio is derived by dividing credit sales by the average account receivable.
Calculation of Accounts Receivable Turnover Ratio
Accounts Receivable Turnover Ratio = Sales/ Average account receivable
Accounts Receivable Turnover Ratio = $1,272,390/ 60,590
Accounts Receivable Turnover Ratio = 21 Times
Calculation of Day's Sales in Accounts Receivable
Days' Sales in Accounts Receivable = 365/ Accounts Receivable Turnover Ratio
Days' Sales in Accounts Receivable = 365/ 21
Days' Sales in Accounts Receivable = 17.38
Accounts Receivable Turnover Ratio = 21 Times
Days' Sales in Accounts Receivable = 17.38
balaji rao answered 3 years agoRelated Solutions
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For two recent years, Robinhood Company reported the
following:
20Y9
20Y8
Sales
$7,357,500
$6,195,000
Accounts receivable:
Beginning of year
550,000
500,000
End of year
540,000
550,000
a. Determine the accounts receivable turnover
for 20Y9 and 20Y8. Round answers to one decimal place.
20Y8:
20Y9:
b. Determine the days’ sales in receivables for
20Y9 and 20Y8. Use 365 days and round all calculations to one
decimal place.
20Y8: days
20Y9: days
c. Are the changes...
Accounts Receivable Turnover and Days' Sales in Receivables Quasar, Inc. sells clothing, accessories, and personal care...
Accounts Receivable Turnover and Days' Sales in Receivables
Quasar, Inc. sells clothing, accessories, and personal care
products for men and women through its retail stores. Quasar
reported the following data for two recent years:
Year 2
Year 1
Sales
$3,798,190
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Accounts receivable
321,200
306,600
Assume that accounts receivable were $350,400 at the beginning
of Year 1.
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Year 2 and Year 1. Round to one decimal place.
Year 2:
Year 1:
b. Compute...
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Note: In this chapter and in all succeeding work
throughout the course, unless instructed
otherwise, use the following rates, ceiling, and
maximum taxes.
Employee and Employer OASDI:
6.20%
$127,200
$7,886.40
Employee* and Employer HI:
1.45%
No limit
No maximum
Self-employed OASDI:
12.4%
$127,200
$15,772.80
Self-employed HI:
2.9%
No limit
No maximum
1.
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