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Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores....

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Accounting

Accounts Receivable Analysis

Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions):

Xavier Lestrade
Sales $8,500,000 $4,585,000
Credit card receivables-beginning 820,000 600,000
Credit card receviables-ending 880,000 710,000

a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round your calculations and answers to one decimal place. Assume 365 days a year.

Xavier Lestrade
1. Accounts receivable turnover fill in the blank 1 fill in the blank 2
2. Number of days' sales in receivables fill in the blank 3 days fill in the blank 4 days

b. Xavier's accounts receivable turnover is much

higherlower

than Lestrade's. The number of days' sales in receivables is

higherlower

for Xavier than for Lestrade. These differences indicate that Xavier is able to turn over its receivables

lessmore

quickly than Lestrade. As a result, it takes Xavier

lessmore

time to collect its receivables.

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