Use the data in previous exercise to analyze the accounts receivable turnover ratios of H.J. Heinz Company and The Limited Brands Inc. c. Explain the logic underlying your answer in (b).

The Limited Brands Inc. sells women’s clothing and personal health care products through specialty retail stores including Victoria’s Secret and Bath & Body Works stores. The Limited Brands reported the following (in millions) for two recent years:

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$9,613&\$8,632\\ \text{Accounts receivable}&267&249 \end{array}$$

Assume that accounts receivable (in millions) were $313 at the beginning of Year 1. b. Compute the day’s sales in receivables for Year 2 and Year 1. Round to one decimal place.

The Limited Brands Inc. sells women’s clothing and personal health care products through specialty retail stores including Victoria’s Secret and Bath & Body Works stores. The Limited Brands reported the following (in millions) for two recent years:

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$9,613&\$8,632\\ \text{Accounts receivable}&267&249 \end{array}$$

Assume that accounts receivable (in millions) were $313 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.

H.J. Heinz Company was founded in 1869 at Sharpsburg, Pennsylvania, by Henry J. Heinz. The company manufactures and markets food products throughout the world, including ketchup, condiments and sauces, frozen food, pet food, soups, and tuna. For two recent years, H.J. Heinz reported the following (in thousands):

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$10,706,588&\$10,494,983\\ \text{Accounts receivable}&1,265,032&1,045,338 \end{array}$$

Assume that accounts receivable (in millions) were $576,700 at the beginning of Year 1. Assume that the accounts receivable (in thousands) were$1,171,797 at the beginning of Year 1. c. What conclusions can be drawn from these analyses regarding Heinz’s efficiency in collecting receivables?

H.J. Heinz Company was founded in 1869 at Sharpsburg, Pennsylvania, by Henry J. Heinz. The company manufactures and markets food products throughout the world, including ketchup, condiments and sauces, frozen food, pet food, soups, and tuna. For two recent years, H.J. Heinz reported the following (in thousands):

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$10,706,588&\$10,494,983\\ \text{Accounts receivable}&1,265,032&1,045,338 \end{array}$$

Assume that accounts receivable (in millions) were $576,700 at the beginning of Year 1. Assume that the accounts receivable (in thousands) were$1,171,797 at the beginning of Year 1. b. Compute the days’ sales in receivables at the end of Year 2 and Year 1. Round to one decimal place.

H.J. Heinz Company was founded in 1869 at Sharpsburg, Pennsylvania, by Henry J. Heinz. The company manufactures and markets food products throughout the world, including ketchup, condiments and sauces, frozen food, pet food, soups, and tuna. For two recent years, H.J. Heinz reported the following (in thousands):

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$10,706,588&\$10,494,983\\ \text{Accounts receivable}&1,265,032&1,045,338 \end{array}$$

Assume that accounts receivable (in millions) were $576,700 at the beginning of Year 1. Assume that the accounts receivable (in thousands) were$1,171,797 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.

Polo Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company’s products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands) for two recent years:

$$\begin{array}{c} &\textbf{For the Period Ending}\\ \hline \end{array}$$

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$5,660,300&\$4,978,900\\ \text{Accounts receivable}&592,700&486,200 \end{array}$$

Assume that accounts receivable (in millions) were $576,700 at the beginning of Year 1. c. What conclusions can be drawn from these analyses regarding Ralph Lauren’s efficiency in collecting receivables?

Polo Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company’s products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands) for two recent years:

$$\begin{array}{c} &\textbf{For the Period Ending}\\ \hline \end{array}$$

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$5,660,300&\$4,978,900\\ \text{Accounts receivable}&592,700&486,200 \end{array}$$

Assume that accounts receivable (in millions) were $576,700 at the beginning of Year 1. b. Compute the days’ sales in receivables for Year 2 and Year 1. Round to one decimal place.

Polo Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company’s products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Polo Jeans Co., and Chaps. Polo Ralph Lauren reported the following (in thousands) for two recent years:

$$\begin{array}{c} &\textbf{For the Period Ending}\\ \hline \end{array}$$

$$\begin{array}{lcr} &\textbf{Year 2}&\textbf{Year 1}\\ \hline \text{Net sales}&\$5,660,300&\$4,978,900\\ \text{Accounts receivable}&592,700&486,200 \end{array}$$

Assume that accounts receivable (in millions) were $576,700 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place

List any errors you can find in the following partial balance sheet:

$$\begin{array}{c} &\textbf{Napa Vino Company}\\ &\textbf{Balance Sheet}\\ &\textbf{December 31,2014}\\ \hline \end{array}$$

$$\begin{array}{lcrr} &\text{Assets}\\ \text{Current assets:}&&&\\ \quad\text{Cash}&&&\$78,500\\ \quad\text{Notes receivable}&&\$300,000&\\ \quad\quad\text{Less interest receivable}&&\underline{4,500}&295,500\\ \text{Accounts receivable}&&\$1,200,000&\\ \quad\quad\text{Plus allowance for doubtful accounts}&&\underline{11,500}&1,211,500\\ \end{array}$$

Journalize the following transactions in the accounts of Safari Games Co., which operates a riverboat casino: Apr. 18. Received a $60,000, 30-day, 7% note dated April 18 from Glenn Cross on account. 30. Received a$42,000, 60-day, 8% note dated April 30 from Rhoni Melville on account. May 18. The note dated April 18 from Glenn Cross is dishonored, and the customer’s account is charged for the note, including interest. June 29. The note dated April 30 from Rhoni Melville is dishonored, and the customer’s account is charged for the note, including interest. Aug. 16. Cash is received for the amount due on the dishonored note dated April 18 plus interest for 90 days at 8% on the total amount debited to Glenn Cross on May 18. Oct. 22. Wrote off against the allowance account the amount charged to Rhoni Melville on June 29 for the dishonored note dated April 30.

Journalize the following transactions of Sanchez Productions: July 12. Received a $240,000, 120-day, 7% note dated July 12 from Accolade Co. on account. Nov. 9. The note is dishonored by Accolade Co. Dec. 9. Received the amount due on the dishonored note plus interest for 30 days at 9% on the total amount charged to Accolade Co. on November 9

The following selected transactions were completed by Easy-Zip Co., a supplier of zippers for clothing:

2013 Dec. 16. Received from Lake Shore Clothing & Bags Co., on account, a $21,000, 90-day, 8% note dated December 16. 31. Recorded an adjusting entry for accrued interest on the note of December 16. 31. Recorded the closing entry for interest revenue.

2014 Mar. 16. Received payment of note and interest from Lake Shore Clothing & Bags Co.

Journalize the entries to record the transactions.

The series of seven transactions recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed. Briefly describe each transaction.

$$\begin{array}{c} \textbf{Cash}\\ \end{array}$$

$$\begin{array}{lr|lr} \hline(7)&61,509&&\\ \end{array}$$

$$\begin{array}{c} \textbf{Notes Receivable}\\ \end{array}$$

$$\begin{array}{lr|lr} \hline(5)&60,000&(6)&60,000\\ \end{array}$$

$$\begin{array}{c} \textbf{Accounts Receivable}\\ \end{array}$$

$$\begin{array}{lr|lr} \hline(1)&75,000&(3)&15,000\\ (6)&60,600&(5)&60,000\\ &&(7)&60,600\\ \end{array}$$

$$\begin{array}{c} \textbf{Sales Returns and Allowances}\\ \end{array}$$

$$\begin{array}{lr|lr} \hline(3)&15,000&&\\ \end{array}$$

$$\begin{array}{c} \textbf{Merchandise Inventory}\\ \end{array}$$

$$\begin{array}{lr|lr} \hline(4)&9,000&(2)&45,000\\ \end{array}$$

$$\begin{array}{c} \textbf{Cost of Merchandise Sold}\\ \end{array}$$

$$\begin{array}{lr|lr} \hline(2)&45,000&(4)&9,000\\ \end{array}$$

$$\begin{array}{c} \textbf{Sales}\\ \end{array}$$

$$\begin{array}{lr|lr} \hline&&(1)&75,000\\ \end{array}$$