Question
Analyzing the Allowance for Uncollectible Accounts Following is the current asset section from the Ralph Lauren Corporation balance sheet: (in millions) March 28, 2020 March
Analyzing the Allowance for Uncollectible Accounts Following is the current asset section from the Ralph Lauren Corporation balance sheet:
(in millions) | March 28, 2020 | March 30, 2019 |
---|---|---|
Cash and cash equivalents | $1,620.4 | $584.1 |
Short-term investments | 495.9 | 1,403.4 |
Accounts receivable, net allowances of $276.2 million and $192.2 million | 277.1 | 398.1 |
Inventories | 736.2 | 817.8 |
Income tax receivable | 84.8 | 32.1 |
Prepaid expenses and other current assets | 160.8 | 359.3 |
Total current assets | $3,375.2 | $3,594.8 |
The 2020 allowance consists of $204.7 for returns and $71.5 for uncollectible accounts. The amounts for 2019 were $176.5 and $15.7.
a. Compute the gross amount of accounts receivable for both 2020 and 2019. Compute the percentage of the allowance for uncollectible accounts relative to the gross amount of accounts receivable for each of these years.
Round percentages one decimal place (i.e., 0.2538 = 25.4%)
2020 | 2019 | |||
---|---|---|---|---|
Gross receivables | Answer
| million | Answer
| million |
% of allowance for uncollectibles to gross A/R | Answer
| % | Answer
| % |
b. Ralph Lauren reported net sales of $6,159.8 million in 2020. Compute its accounts receivable turnover and average collection period. Round answers to two decimal places.
Accounts receivable turnover | Answer
| times |
Average collection period | Answer
| days |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started