Below Are Amounts for Two Companies For Each Company,calculate the Receivables Turnover Ratio

question 82

Short Answer

Below are amounts for two companies:
$$\begin{array} { l c c c } & \begin{array} { c } \text { Beginning } \\\text { Accounts } \\\text { Receivable (net) }\end{array} & \begin{array} { c } \text { Ending } \\\text { Accounts } \\\text { Receivable } \\\text { (net) }\end{array} & \begin{array} { c } \text { Net } \\\text { Sales }\end{array} \\\hline \text { Company 1 } & \$ 1,500 & \$ 1,200 & \$ 29,700 \\\text { Company 2 } & 3,100 & 3,300 & 80,000\end{array}$$
For each company,calculate the receivables turnover ratio.Which company appears more efficient in collecting cash from sales?

Appreciate the significance of the cost-flow assumption in inventory management.

Understand how the retail inventory method estimates ending inventory.

Grasp the necessity of disclosing changes in inventory valuation methods.

Interpret how inventory valuation affects financial statements and business decisions.

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