b. Have a representative or ercisecuon and cash tlows method is preferred for ta

ID: 2329977 • Letter: B

Question

b. Have a representative or ercisecuon and cash tlows method is preferred for tax reporting? For financial reporting? What restrictions are placed o use of LIFO for tax reporting? each cost flow method has on assets (ending inventory), net income, arch Assignment Analyzing two real world companies' accounts receivable Using the most current annual reports or the Forms 10-K for Starbucks, the world's largest coffee houses, and Whirlpool, w obtain the Forms 10-K, use either the EDGAR system following the instructions in Appendix A or the companies' websites. The annual reports can be found on the companies' websites Required a. For each company, compute accounts receivable as a percentage of revenue. Show your hich manufactures appliances, complete the following requirements. To computations b. Which company appears to be making more of its sales on sExplain your answer. c. Try to provide a logical explanation as to why one of the ton panies is making more of its sales on account than the other. ATC 5-4 Writing Assignment Cost of charge sales Paul Smith is opening a plumbing supply store in University City. He plans to sell plumbing parts and materials to both wholesale and retail customers. Since contractors (wholesale customers) prefer to buy parts and materials and pay at the end of the month, Paul expects he will have to offer charge ac counts. He plans to offer charge sales to the wholesale customers only and to require to pay with either cash or credit cards. Paul wondered what expenses his business w mers ve to the charge sales and tho

Explanation / Answer

Starbucks-2017

Whirlpool-2017

Accounts receivables as % of sales

3.89%

12.54%

net accounts receivables

870400

2665000

total revenue

22386800

21253000

Whirlpool has more % of accounts receivables than the Starbucks because of higher credit sales

Whirlpool has more % of accounts receivables than the Starbucks because star bucks more sale in cash mode because of the nature of the industry in which in operates and it is a fast moving consumer goods while whirlpool is a consumer goods company which sales its product on credit basis