Analyzing changes in accounts receivable. The tinancial statements and notes for May Department Stores reveal the following
Question:
Analyzing changes in accounts receivable. The tinancial statements and notes for May Department Stores reveal the following for four recent years (amounts in millions):
a. Compute the amount of accounts written off as uncollectible during Year 9. Year 10, Year 11. and Year 12.
b. Compute the amount of cash collections from credit customers during Year 9, Year 10, Year 11, and Year 12.
c. Calculate the accounts receivable turnover ratio for Year 9. Year 10, Year 11. and Year 12 using total sales in the numerator and average accounts receivable (net) in the denominator.
d. Repeat part c but use credit sales in the numerator.
e. What are the likely reasons for the different trends in the two measures of the ac- counts receivable turnover ratio in parts c and d?
Step by Step Answer:
Financial Accounting An Introduction To Concepts Methods And Uses
ISBN: 9780030259623
9th Edition
Authors: Clyde P. Stickney, Roman L. Weil