11/3 pt2

Required:

1. Calculate the receivables turnover ratios and days to collect for Smucker and Seneca for the fiscal years ended in 2019 and 2018. (Round to one decimal place.)
2. Which of the companies is quicker to convert its receivables into cash?

M8-15 EVALUATING THE EFFECT OF FACTORING ON THE RECEIVABLES TURNOVER

RATIO AND COMPUTING THE COST OF FACTORING LO 8-4

After noting that its receivables turnover ratio had declined, Imperative Company decided for the first time in the company's history to sell $500,000 of receivables to a factoring company. The factor charges a factoring fee of 3 percent of the receivables sold. How much cash does Imperative receive on the sale? Calculate the factoring fee and describe how it is reported by Imperative Company. All else equal, how will this affect Imperative's receivables turnover ratio in the future?

PB8-5 Analyzing Allowance for Doubtful Accounts, Receivables Turnover Ratio, and Days to Collect LO 8-4 J. M. Smucker is well known for its fruit jams and Seneca Foods Corporation is the company behind Green Giant canned vegetables. To evaluate their ability to collect on credit sales, consider the following rounded information in their annual reports (amounts in millions). J. M. Smucker Seneca Foods Corporation J.M. Smocker Seneca Foods Fiscal Year Ended April 30: 2019 2018 2017 2019 2018 2017 Net Sales $7,840 $7.360 $7,390 $1,200 $1.160 $1,260 Accounts Receivable 507 386 440 85 67 73 Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance 2 1 2 1 1 1 505 385 440 84 66 72 Required: 1. Calculate the receivables turnover ratios and days to collect for Smucker and Seneca for the fiscal years ended in 2019 and 2018. (Round to one decimal place.) 2. Which of the companies is quicker to convert its receivables into cash? M8-15 EVALUATING THE EFFECT OF FACTORING ON THE RECEIVABLES TURNOVER RATIO AND COMPUTING THE COST OF FACTORING LO 8-4 After noting that its receivables turnover ratio had declined, Imperative Company decided for the first time in the company's history to sell $500,000 of receivables to a factoring company. The factor charges a factoring fee of 3 percent of the receivables sold. How much cash does Imperative receive on the sale? Calculate the factoring fee and describe how it is reported by Imperative Company. All else equal, how will this affect Imperative's receivables turnover ratio in the future?