The financial data for Michaels’ Foods Inc. and Sunshine Enterprises Ltd. for the current year are as follows (amounts in thousands):

Required 

a. Calculate the accounts receivable turnover for each company assuming that all sales are on account. 

b. Calculate the average number of days required by each company to collect its receivables. 

c. Which company appears to be more efficient at handling its accounts receivable? 

d. What additional information would be helpful in evaluating management’s handling of the collection of accounts receivable?

Transcribed Image Text:

Michaels' Foods Sunshine Enterprises Annual Sales $60,600 30,100 Accounts Receivable Jan. 1 $6,200 1,800 Accounts Receivable Dec. 31 $8,100 2,050