Ask Question
18 September, 04:51

ShipIt Corporation reported the following rounded amounts (in millions) : 2016 2015 Accounts Receivable $ 5,535 $ 5,240 Allowance for Doubtful Accounts (355) (360) Accounts Receivable, Net of Allowance $ 5,180 $ 4,880 Net Sales (assume all on credit) $ 43,500 $ 42,000 Required: Determine the receivables turnover ratio and days to collect for 2016. (Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 1 decimal place.) Do the measures calculated in requirement 1 represent an improvement (or deterioration) in receivables turnover, compared to 2015 when the turnover was 9.7?

+5
Answers (1)
  1. 18 September, 04:59
    0
    a. 8.65 times

    b. 42 days

    Explanation:

    The computation of Receivables turnover ratio and days to collect is shown below:-

    a. Receivables turnover ratio = Net sales : Average receivables

    = $43,500 : ($5,180 + $4,880) : 2

    = $43,500 : ($10,060 : 2)

    = $43,500 : $5,030

    = 8.65 times

    b. Days to collect = 365 : Receivables turnover ratio

    = 365 : 8.65 times

    = 42 days
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “ShipIt Corporation reported the following rounded amounts (in millions) : 2016 2015 Accounts Receivable $ 5,535 $ 5,240 Allowance for ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers