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