Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 16, Problem 10E
Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions):
- A. Determine the (1) accounts receivable turnover and (2) the number of days’ sales in receivables for both companies. Round to one decimal place.
- B. Compare the two companies with regard to their credit card policies.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Bassett Stores Company and Fox Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (all numbers are in millions):
Bassett
Fox
Merchandise sales
$229,950
$321,200
Credit card receivables—beginning
37,356
66,625
Credit card receivables—ending
31,188
51,295
a. (1) Determine the accounts receivable turnover for both companies. Round to one decimal place.
Bassett Stores
fill in the blank 1
Fox Stores
fill in the blank 2
(2) Determine the days' sales in receivables for both companies. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place.
Bassett Stores
fill in the blank 3 days
Fox Stores
fill in the blank 4 days
b. What conclusion can be drawn regarding the two companies and…
Accounts Receivable Analysis
Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements
for both companies for two recent years is as follows (in millions):
Хavier
Lestrade
Sales
$310,250
$434,350
Credit card receivables-beginning
46,788
49,619
Credit card receivables-ending
39,062
38,203
a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round answers to one decimal place. ASsume 365 days a year.
Xavier
Lestrade
1. Accounts receivable turnover
2. Number of days' sales in receivables
days
days
b. Xavier's accounts receivable turnover is
than Lestrade's. The number of days' sales in receivables is
for Xavier than for Lestrade. These differences indicate that Xavier
is able to turn over its receivables
quickly than Lestrade. As a result, it takes Xavier
time to collect…
Accounts Receivable Analysis
Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions):
Xavier
Lestrade
Sales
$219,000
$306,600
Credit card receivables-beginning
40,352
63,501
Credit card receivables-ending
33,688
48,891
a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round answers to one decimal place. Assume 365 days a year.
Xavier
Lestrade
1. Accounts receivable turnover
fill in the blank 1
fill in the blank 2
2. Number of days' sales in receivables
fill in the blank 3
days
fill in the blank 4
days
b. Xavier’s accounts receivable turnover is
than Lestrade’s. The number of days' sales in receivables is
for Xavier than for Lestrade. These…
Chapter 16 Solutions
Managerial Accounting
Ch. 16 - Prob. 1DQCh. 16 - What is the advantage of using comparative...Ch. 16 - Prob. 3DQCh. 16 - Prob. 4DQCh. 16 - Prob. 5DQCh. 16 - What do the following data, taken from a...Ch. 16 - Prob. 7DQCh. 16 - Prob. 8DQCh. 16 - The dividend yield of Suburban Propane Partners,...Ch. 16 - Prob. 10DQ
Ch. 16 - Prob. 1BECh. 16 - Prob. 2BECh. 16 - The following items are reported on a companys...Ch. 16 - Prob. 4BECh. 16 - Prob. 5BECh. 16 - Prob. 6BECh. 16 - Prob. 7BECh. 16 - Prob. 8BECh. 16 - Prob. 9BECh. 16 - Prob. 10BECh. 16 - Prob. 11BECh. 16 - Prob. 1ECh. 16 - The following comparative income statement (in...Ch. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Prob. 5ECh. 16 - The following data were taken from the balance...Ch. 16 - PepsiCo, Inc. (PEP), the parent company of...Ch. 16 - Current position analysis The bond indenture for...Ch. 16 - Prob. 9ECh. 16 - Accounts receivable analysis Xavier Stores Company...Ch. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Ratio of liabilities to stockholders equity and...Ch. 16 - Hasbro, Inc. (HAS), and Mattel, Inc. (MAT), are...Ch. 16 - Recent balance sheet information for two companies...Ch. 16 - Prob. 16ECh. 16 - Prob. 17ECh. 16 - Prob. 18ECh. 16 - Prob. 19ECh. 16 - Prob. 20ECh. 16 - Prob. 21ECh. 16 - Prob. 22ECh. 16 - Prob. 23ECh. 16 - Prob. 24ECh. 16 - Prob. 25ECh. 16 - Comprehensive income Anson Industries, Inc.,...Ch. 16 - Prob. 1PACh. 16 - Prob. 2PACh. 16 - Prob. 3PACh. 16 - Measures of liquidity, solvency, and profitability...Ch. 16 - Prob. 5PACh. 16 - Prob. 1PBCh. 16 - Prob. 2PBCh. 16 - Prob. 3PBCh. 16 - Prob. 4PBCh. 16 - Prob. 5PBCh. 16 - Prob. 1MADCh. 16 - Prob. 2MADCh. 16 - Deere Company (DE) manufactures and distributes...Ch. 16 - Marriott International, Inc. (MAR), and Hyatt...Ch. 16 - Prob. 1TIFCh. 16 - Real-world annual report The financial statements...Ch. 16 - Prob. 3TIF
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The following select financial statement information from Vortex Computing. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Vortex Computing if industry average for accounts receivable turnover ratio is 4 times and days sales in receivables ratio is 85 days?arrow_forwardAssume selected financial data for Walmart and Target, two close competitors in the retail industry, are as follows: Net Beginning Accounts Ending Accounts ($ in millions) Sales Receivable Receivable $463,854 79,466 $6,064 6,653 $6,937 6,427 Walmart Target Required: 1-a. Calculate the receivables turnover ratio and average collection period for Walmart and Target. (Enter your answers in millions. Do not round your intermediate calculations and round your answers to 1 decimal place.) Receivables Turnover Ratio Receivables Turnover Ratio Walmart times %3D Target 0 times %3D Average Collection Period Average Collection Period %3D Walmart 0 days Target 0 days 1-b. Which company maintains a higher receivables turnover? Walmart Target II II II IIarrow_forwardFizzy Sodas and Hayes Companies are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance Req 1 Complete this question by entering your answers in the tabs below. Req 2A Required: 1. Calculate the receivables turnover ratios and days to collect for Fizzy Sodas and Hayes Companies for 2018 and 2017. 2-a. Which of the companies was quicker to convert its receivables into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables into cash in 2017? Req 2B Receivables Turnover Ratio Days to collect 2018 2018 $ 40,630 4,410 620 3,790 Fizzy Sodas Fizzy Sodas 2017 $ 45,120 4,710 610 4,100 Hayes Companies…arrow_forward
- Analyzing Accounts ReceivableThe following information is taken from the annual report of Coca-Cola Enterprises, Inc.: (amounts in millions) Year 1 Year 2 Net sales $19,058 $19,606 Accounts receivable (net) 1,884 1,802 Calculate the receivable turnover ratio and the receivable collection period for Year 1 and Year 2. Round your answer to two decimal places. Year 1 Year 2 Receivable turnover ratio Receivable collection period days days How much additional cash flow from operations could Coca-Cola Enterprises generate in Year 2 if it could reduce its receivable collection period to just 30 days?Round your final answer to the nearest million dollar. Year 2 Additional cash flow millionarrow_forwardYou are an investor looking to contribute financially to either company A or Company B. The following, select financial information as follows. Company A and company B, respectively: Beginning Account Receivable $ 50,000, 60,000; Ending Account Receivable $ 80,000, 90,000; Net credit sales $ 550,000, $460,000. Based on the information provided: compute the account receivable turnover ratio. Compute the number of days sales in receivables ratio for both companies A and company B ( round all answers to two decimals places) Interpret the outcomes stating which company you would invest in and why.arrow_forwarda) Calculate Kopitiam Sdn Bud’s accounts receivable turnover ratio for Year 2 and Year 3. b) Calculate the number of days the average balance of receivables is outstanding before being converted into cash (turnover in days) for Year 2 and Year 3 c) What problem do you see with the company’s credit policy if the terms are net 30 days? Explain your answer.arrow_forward
- The following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30. Year 3 Year 2 Year 1 Accounts receivable, end of year $113,600 $120,000 $128,200 Sales 700,800 682,550 a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Year 3 Year 2 1. Accounts receivable turnover fill in the blank 1 fill in the blank 2 2. Number of days' sales in receivables fill in the blank 3 days fill in the blank 4 days b. What conclusion can be drawn from these data concerning accounts receivable and credit policies?The collection of accounts receivable has . This can be seen in the in accounts receivable turnover and the in the collection period. The company either became aggressive in…arrow_forwarded Softee Sodas and Patterson Beverage Company are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 2018 $ 35,660 4,130 550 3,580 Softee Sodas 2017 $ 39,520 4,390 540 3,850 Patterson Beverage Company 2016 $ 44,440 4,580 530 4,050 2018 $ 71,440 7,680 100 7,580 2017 $ 72,120 7,590 130 2016 $ 66,660 7,250 140 7,460 7,110 Required: 1. Calculate the receivables turnover ratios and days to collect for Softee Sodas and Patterson Beverage Company for 2018 and 2017. 2-a. Which of the companies was quicker to convert its receivables into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables into cash…arrow_forwardThe following data are for Rocky Company. Current Year 1 Year Ago Accounts receivable, net $ 156,800 $ 141,900 Net sales 1,031,105 1,080,600 (a) Compute Rocky's accounts receivable turnover. (b) If its competitor, Dixon, has an accounts receivable turnover of 9, which company appears to be doing a better job of managing its receivables?arrow_forward
- Bassett Stores Company and Fox Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (all numbers are in millions): Merchandise sales Bassett Fox $208,050 $292,000 53,969 16,961 41,551 Credit card receivables beginning 20,317 Credit card receivables-ending a. (1) Determine the accounts receivable turnover for both companies. Round to one decimal place. Bassett Stores Fox Stores (2) Determine the days' sales in receivables for both companies. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Bassett Stores Fox Stores days days b. What conclusion can be drawn regarding the two companies and their credit card policies?arrow_forwardA company reports the following: Sales Average accounts receivable (net) Determine (a) the accounts receivable turnover and (b) number of days' sales in receivables. Round your answers to one decimal place. Assume a 365- day year. a. Accounts receivable turnover $398,580 76,650 b. Number of days' sales in receivables daysarrow_forwardes Fizzy Sodas and Hayes Companies are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 2018 $ 40,630 4,410 620 3,790 Fizzy Sodas 2017 $ 45,120 4,710 610 4,100 2016 $ 47,640 4,930 600 4,330 2018 $ 82,416 8,240 100 8,140 Hayes Companies 2017 $82,945 8,150 130 8,020 Required: 1. Calculate the receivables turnover ratios and days to collect for Fizzy Sodas and Hayes Companies for 2018 and 2017. 2-a. Which of the companies was quicker to convert its receivables into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables into cash in 2017? 2016 $ 71,470 7,770 140 7,630arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License