Question 4 (20 points) Alpha Company has the following account balances informat
ID: 2396819 • Letter: Q
Question
Question 4 (20 points) Alpha Company has the following account balances information for fiscal year 2015 & 2016 (all balances are normal): Alpha Company December 31 Accounts
Accounts Receivable
2016
$50,500
2015
$40,500
Allowance for Doubtful Accounts
2016
2,500
2015
1,500
Merchandise Inventory
2016
57,000
2015
50,000
Office Supplies
2016
25,000
2015
20,000
Credit Sales
2016
985,000
2015
740,000
Sales Discounts
2016
10,000
2015
9,000
Interest Income
2016
25,000
2015
20,000
Cost of Goods Sold
2016
460,000
2015
385,000
1. What is the FY 2016 accounts receivable turnover ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word times. (Example 1.123 would be entered 1.1 times)
2. What is the FY 2016 days outstanding for accounts receivable ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word days. (Example 1.123 would be entered 1.1 days) Question 4 options:
Explanation / Answer
1) Account receivable turnover = Net credit sale/average receivable
Net credit Sales = 985000-10000 = 975000
Average receivable = (50500+40500/2) = 45500
Account receivable turnover = 975000/45500 = 21.4 Times
2) Days outstanding for account recievable = 365/21.4 = 17.1 Days
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.