Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 9. estion 9 points 1. Ahmed Company would like to compare its days' sales in receivables with that of a competitor, Khalid Company.

image text in transcribedimage text in transcribed

Question 9. estion 9 points 1. Ahmed Company would like to compare its days' sales in receivables with that of a competitor, Khalid Company. Both companies have had similar sales results in the past, but Khalid Company has had better profit results Ahmed Company suspects th reason for the better profit results is that Khalid Company did a better job of managing receivables Ahmed Company uses a calendar year that ends on December 31, while Khalid Company uses a fiscal year that ends on July 31 Information related t and receivables of the two companies follows: For Year Ended December 31, 20XX Ahmed Company Net sales $ 3,780,000 Receivables, less allowance for doubtful accounts of $16,000 253,000 For Year Ended July 31, 20XX Khalid Company Net sales $ 3,885,000 Receivables, less allowance for doubtful accounts of $8,000 138,000 equired a. Compute the days' sales in receivables for both companies. (Use year-end gross receivables.) [2 marks] Company Days' Sales in Receivables Ratio b. Which company manages their receivables better? Explain. [1 mark] Ahmed Khalid

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Human Resource Management

Authors: Jean M. Phillips, Stanley M. Gully

1st edition

1111533555, 978-1111533557

More Books

Students also viewed these Accounting questions