ACCOUNTING
Warren, Reeve and Duchac
Financial Accounting
Managerial Accounting
Carl Warren, James M. Reeve, Jonathan E. Duchac
Chapter 17
EX 17-10 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 (all numbers are in millions):
Xavier Lestrade
Merchandise sales $28,000 $65,000
Credit card receivables—beginning 2,750 15,000
Credit card receivables—ending 2,250 11,000
a. Determine the (1) accounts receivable turnover and (2) the number of days’ sales in receivables for both companies.Round to one decimal place.
b. Compare the two companies with regard to their credit card policies.
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