Accounts Receivable Analysis The following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30. Year 3 Year 2 Year 1 Accounts receivable, end of year $ 450,000 $ 375,000 $300,000 Sales 2,640,000 1,957,500 a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2) the days' sales in receivables. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Year 3 Year 2 1. Accounts receivable turnover 6.4 5.8 2. Number of days' sales in receivables days days b. What conclusion can be drawn from these data concerning accounts receivable and credit policies? The collection of accounts receivable has This can be seen in the in accounts receivable turnover and the in the collection period. The company either became aggressive in collecting accounts receivable or restrictive in granting credit to customers in Year 3.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Accounts Receivable Analysis
The following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30.
Year 3
Year 2
Year 1
Accounts receivable, end of year
$ 450,000
$ 375,000
$300,000
Sales
2,640,000
1,957,500
a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2) the days' sales in receivables. Assume there are 365 days in the year. Round intermediate
calculations to the nearest whole dollar and final answers to one decimal place.
Year 3
Year 2
1. Accounts receivable turnover
6.4
5.8
2. Number of days' sales in receivables
days
days
b. What conclusion can be drawn from these data concerning accounts receivable and credit policies?
The collection of accounts receivable has
This can be seen in the
in accounts receivable turnover and the
in the
collection period. The company either became
aggressive in collecting accounts receivable or
restrictive in granting credit to customers in
Year 3.
Transcribed Image Text:Accounts Receivable Analysis The following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30. Year 3 Year 2 Year 1 Accounts receivable, end of year $ 450,000 $ 375,000 $300,000 Sales 2,640,000 1,957,500 a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2) the days' sales in receivables. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Year 3 Year 2 1. Accounts receivable turnover 6.4 5.8 2. Number of days' sales in receivables days days b. What conclusion can be drawn from these data concerning accounts receivable and credit policies? The collection of accounts receivable has This can be seen in the in accounts receivable turnover and the in the collection period. The company either became aggressive in collecting accounts receivable or restrictive in granting credit to customers in Year 3.
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