During its first year of operations, Fertig Company had credit sales of $3,000,000, of which $400,000 remained uncollected at year- end. The credit manager estimates that $18,000 of these receivables will become uncollectible. The accounts receivable turnover is 10 times and average collection period is 36.5 days. Assume that average net accounts receivable were $300.000. Explain what these measures tell us.

During its first year of operations, Fertig Company had credit sales of $3,000,000, of which $400,000 remained uncollected at year- end. The credit manager estimates that $18,000 of these receivables will become uncollectible. The accounts receivable turnover is 10 times and average collection period is 36.5 days. Assume that average net accounts receivable were $300.000. Explain what these measures tell us.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter16: Accounting For Accounts Receivable

Section: Chapter Questions

Problem 2CE: Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit...

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