number of dayst and rund to one c. Does the change in accounts receivable turnov

Question

number of dayst and rund to one c. Does the change in accounts receivable turnover and the receivables from 2015 to 2016 indicate a favorable or an unfavorable trend? S in PE 8-6B Accounts receivable turnover and number of days' sales in receivables Financial statement data for years ending December 31 for Robinhood Company folle 2015 2016 $7,906,000 6,726,000 Sales Accounts receivable: Beginning of year End of year 600,000 580,000 540,000 600,000 the accounts receivable turnover for 2016 and 2015. a. Determine b. Determine the number of days' sales in receivables for 2016 and 2015. Use 365 and round to one decimal place. days c. Does the change in accounts receivable turnover and the number of days' sales in receivables from 2015 to 2016 indicate a favorable or an unfavorable trend? EX 8-1 Classifications of receivables Boeing is one of the world's major aerospace firms with operations involving commercial aircraft, military aircraft, missiles, satellite systems, and information and battle manage ment systems. As of a recent year, Boeing had $2,788 million of receivables involving U.S. government contracts and $903 million of receivables involving commercial aircraft customers, such as Delta Air Lines and United Airlines. OBJ.1 Should Boeing report these receivables separately in the financial statements or combine them into one overall accounts receivable amount? Explain

Explanation / Answer

8-6B

8-1: Accounts receivable are reported net of allowance for doubtful debts on the face of the balance sheet. Hence 2788+903= 3691 will be reported as one amount

2016 2015 Change from 2015 in 2016 Trend A Sales 7,906,000.00 6,726,000.00 B=A/365 Sales per day 21,660.27 18,427.40 Accounts receivable C Beginning of year 600,000.00 540,000.00 D End of year 80,000.00 600,000.00 E=(C+D)/2 Average of account receivables 340,000.00 570,000.00 F=A/E Accounts receivable turnover 23.25 11.80 11.45 Favourable as averagare receivalbes decline means good collection G=365/F Number of days in sales 15.70 30.93 -15.24 Favourable as credit sales are collected fast

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