Question

Cola Inc. Soda Co. Fiscal Year Ended: 2015 2014 2013 2015 2014 2013 Net Sales $ 39,819 $ 35,690 $ 36,444 $ 62,438 $ 47,932 $ 47,751 Accounts Receivable 4,588 3,903 3,231 6,557 4,804 3,874 Allowance for Doubtful Accounts 57 64 60 153 99 79 Accounts Receivable, Net of Allowance 4,531 3,839 3,171 6,404 4,705 3,795 Required: Calculate the receivables turnover ratios and days to collect for Cola Inc. and Soda Co. for 2015 and 2014. (Use 365 days in a year. Do not round intermediate calculations on Accounts Receivable Turnover Ratio. Round your final answers to 1 decimal place. Use final rounded answers from Accounts Receivable Turnover Ratio for Days to Collect ratio calculation.)

Answer 1

2015 Cola Inc:

A/R TO 9.51

Days to collect 38.00

2014 Cola Inc:

Inventory TO 10.18

Days to collect 36

2015 Soda Co:

A/R TO 11.25

Days to collect 32

2014 Soda Co

A/RTurnover 11.28

Days to collect 32

Step-by-step explanation:

2015

`(COGS)/(Average Inventory) = $Inventory Turnover`

​where:

`$$Average Account Receivable =(Beginning A/R + Ending A/R)/2`

Sales 39,819

ending 4,531

beginnin 3,839

`$$Average A/R=4531 + 3839)/2`

Avg A/R 4185

`(39,819)/(4185) = $A/RTurnover`

A/R TO 9.514695341

`(365)/(A/R   TO) = $Days to collect`

`(365)/(9.51469534050179) = $Days to collect`

Days on Inventory 38

2014:

`(35690)/(3505) = $A/RTurnover`

Inventory TO 10.18259629

`(365)/(10.1825962910128) = $Days to collect`

Days to collect 36

Soda Co:

2015

`(62483)/(5554.5) = $A/RTurnover`

A/R TO 11.24907732

`(365)/(11.2490773246917) = $Days to collect`

Days to collect 32

2014

`(47932)/(4250) = $A/RTurnover`

A/RTurnover 11.27811765

`(365)/(Inventory TO) = $Days on Inventory`

`(365)/(11.2781176470588) = $Days to collect`

Days to collect 32