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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Exercise 7-16
Analyzing Accounts Receivable for Two Companies
The annual reports of Delta, Inc. and SunnyDay Company, two manufacturers of computers, reveal the information below for the current year (amounts in millions). Delta sells custom-order personal computers, primarily to individuals. SunnyDay sells higher-end computers and Internet software, primarily to businesses.
a. Compute the accounts receivable turnover for each company. Round your answers to one decimal place.
| Delta, Inc. | times per year |
| SunnyDay | times per year |
b. Compute the average number of days that accounts receivable are outstanding for each company. Round your answers to one decimal place. Assume a 365-day year.
| Delta, Inc. | days |
| SunnyDay | days |
c. Delta, Inc. has Selectthe samehigherlowerItem 5accounts receivable turnover and Selectthe samehigherlowerItem 6average number of days that accounts receivable are oustanding than SunnyDay. This is most likely because Delta's customers Selectfinance their purchasespay with a credit card or cashhave longer order lead timesItem 7whereas SunnyDay's customers Selectfinance their purchasespay with a credit card or cashhave longer lead timesItem 8.
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