# Toys "R" Us has decreased its receivable turnover over the last three years: which of the following may be a possible cause of this decrease? A) the company has been more selective in choosing reliable customers. B) salesmen have granted customers an extension of credit terms. C) the accounting department has increased the allowance for doubtful accounts. D) all of the above are correct

B) salesmen have granted customers an extension of credit terms.

Explanation:

receivables turnover ratio = net sales / average accounts receivable

A low receivables turnover ratio is usually a bad thing, since most companies sell on credit, i.e. their accounts receivable should be important. A high receivables turnover ratio means that the company is collecting its accounts receivable efficiently and its customers are good payers.

The key point here is average accounts receivable. What can result in a company having very high accounts receivable (compared to its total sales)? The answer is simple, their customers are not paying on time or the company had to extend their credit terms in order to attract more customers.

## Related Questions

A white college receptionist is fired when it is found that she told a black college applicant that the applications for admissions are distinguished by race by the notation of a small RH in the corner of black applicants’ applications. "RH," she says, is her supervisor’s term for "raisin heads," which he calls African-Americans. Is the employee entitled to reinstatement? [Jet magazine article.]

Probably the employee will be entitled to reintegration into the company.  The employee probably lost her job because she exposed the discriminatory employment conditions of blacks in that company. In this case, it is possible for the employee to take legal action for retaliation against her rights, protected by Title VII.

1.Calculate the present value (PV ) of a cash inflow of \$500 in one year, and a cash inflow of \$1,000 in 5 years, assuming a discount rate of 15%.

The present value of \$500 in one year is \$434.78 and the present value of \$1,000 in 5 years is \$497.18

Explanation:

Hi, we need to use the following formula

Present Value = Future Value/ (1+Discount Rate)^years

Therefore, in the case of \$500 in one year.

Present Value = \$500/(1+0.15)^1 = \$434.78

And for \$1,000 in 5 years

Present Value = \$1,000/(1+0.15)^5 = \$497.18

Notice that the discount rate (15%) has to be used in its decimal form, that is 0.15 (which you can get by dividing 15/100).

Best of luck.

Best of luck

Mitchell, a calendar year taxpayer, is the sole proprietor of a fast-food restaurant. His adjusted basis for the building and the related land is \$450,000. On March 4, 2013, state authorities notify Mitchell that his property is going to be condemned so that the highway can be widened. On June 20, Mitchell’s property is officially condemned, and he receives an award of \$625,000. Because Mitchell’s business has been successful in the past, he would like to reopen the restaurant in a new location. a. What is the earliest date Mitchell can acquire a new restaurant and qualify for § 1033 postponement? b. On June 30, Mitchell purchases land and a building for \$610,000. Assuming thathe elects postponement of gain under § 1033, what is his recognized gain?c. What is Mitchell’s adjusted basis for the new land and building?d. If he does not elect § 1033, what are Mitchell’s recognized gain and adjustedbasis?e. Suppose he invests the \$625,000 condemnation proceeds in the stock market onJune 30. What is Mitchell’s recognized gain?

Explanation:

The earliest date Mitchell can purchase land and building is 4 March,2013-the date of threat of condemtion

According to section 1033 if a property similar to the property conveted , no gain shall be recognized.

b) If he elects section 1033 than there is no recognized gain.

c) His adjusted basis is \$450000 cost of old land and building and plus any additional cost above \$625000 what he has received.

d) he he invest in stock he does not qualify for 1033 so his recognized gain is \$625000-450000=\$175000.

A monopolistically competitive firm usually charges more than a perfectly competitive firm because:_____.a. it is part of a group of firms that has formally agreed to control the price and the output of a product.
b. its primary goal is to reap monopoly profits by replacing competition with cooperation.
c. producing homogenous output is more expensive than producing differentiated output.
d. producing differentiated output is more expensive than producing homogenous output.
e. it has a monopoly, but potential entrants exist in the form of contestable markets.

a. it is part of a group of firms that has formally agreed to control the price and the output of a product.

Explanation:

A monopolistic competitive firm ensures that, the price of goods and the output of the products produced by them is controlled. This helps them to dictate the market in which they find themselves in.

Which of the following reflects diseconomies of scale? A. Marginal product decreases as output increases
B. Short-run marginal cost increases as output increases
C. Long-Run marginal cost increases as output increases
D. Short-run average cost increases as output increases
E. As output doubles, long run total cost more than doubles

B. Short-run marginal cost increases as output increases

Explanation:

diseconomies of scale are the cost disadvantages that economic actors accrue due to an increase in organizational size or on output, resulting in production of goods and services at increased per-unit costs.

Suppose the demand and supply curves for good X are both linear. And, the demand price for the first unit of X is \$14, and the supply price for the first unit of X is \$3. If the equilibrium price for good X is \$8 and the equilibrium quantity of X is 12,000 units, then total consumer surplus is \$________, total producer surplus is \$________, and total social surplus is \$__________ a. \$36,000; \$30,000; \$66,000b. \$30,000; \$36,000; \$66,000c. \$6; \$5; \$11d. \$6,000; \$5,000; \$11,000

a. \$36,000; \$30,000

Explanation:

Consumer Surplus is the difference between price paid by the consumer & maximum price he is willing to pay. Graphically it is the triangular area above the equilibrium price, below the demand curve.

Producer Surplus is the difference between price received by the seller & his minimum selling price. Graphically it is the triangular area below the equilibrium price, above the supply curve.

So : The formula = 1/2 (price differential) (quantity)

Consumer Surplus = 1/2 (14-8)(12000) = 1/2 (6) (12000) = 1/2 (72000)

= 36000

Producer Surplus = 1/2 (8-3)(12000) = 1/2 (5) (12000) = 1/2 (60000)

= 30000