The following selected financial information is available for three companies:

Required:

a. Divide the class into three sections and divide each section into groups of three to five students. Assign one of the companies to each of the sections.

Group Tasks (1) Determine the missing amounts for your company.
(2) Determine the percentage of accounts receivable estimated to be uncollectible at the end of 2007 and 2008 for your company.
(3) Determine the percentage of total sales that are sales on account for your company.
(4) Determine the accounts receivable turnover for your company.

Class Discussion

b. Have a representative of each section put the missing information on the board and explain how it was determined.

c. Which company has the highest percentage of sales that are on account?

d. Which company is doing the best job of collecting its accounts receivable? What procedures and policies can a company use to better collect its accounts receivable?

Transcribed Image Text:

Bell Card Zore Total sales Cash sales $125,000 $210,000 ? ? 26,000 $120,000 Sales on account 40,000 ? 75,000 Accounts receivable, January 1, 2008 6,200 42,000 ? Accounts receivable, December 31, 2008 5,600 48,000 7,500 Allowance for doubtful accounts, January 1, 2008 ? ? 405 Allowance for doubtful accounts, December 31, 2008 224 1,680 ? Uncollectible accounts expense, 2008 242 1,200 395 Uncollectible accounts written off 204 1,360 365 Collections of accounts receivable, 2008 ? ? 75,235