The following information was taken from the books of Olmeck, Inc. Year 2Year 1Sales$956,000$992,000Accounts receivable: Beginning of the year120,500136,400 End of the year110,000120,500 a. Determine the accounts receivable turnover for Year 2 and Year 1. Round your answers to one decimal place. Accounts ReceivableTurnoverYear 2fill in the blank 1Year 1fill in the blank 2b. Determine the number of days’ sales in receivables for Year 2 and Year 1. Round your answers to one decimal place. Assume 365 days per year. Number of Days' Salesin ReceivablesYear 2fill in the blank 3 daysYear 1fill in the blank 4 daysc. The industry average for the accounts receivable turnover is 8.0. How does Olmeck, Inc. compare?In Year 2 Olmeck was the industry average. In Year 1, Olmeck was the industry average.

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Description: The following information was taken from the books of Olmeck, Inc. Year 2Year 1Sales$956,000$992,000Accounts receivable: Beginning of the year120,500136,400 End of the year110,000120,500 a. Determine the accounts receivable turnover for Year 2

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 9E

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The following information was taken from the books of Olmeck, Inc.

	Year 2	Year 1
Sales	$956,000	$992,000
Accounts receivable:
Beginning of the year	120,500	136,400
End of the year	110,000	120,500

a. Determine the accounts receivable turnover for Year 2 and Year 1. Round your answers to one decimal place.

	Accounts Receivable Turnover
Year 2	fill in the blank 1
Year 1	fill in the blank 2

b. Determine the number of days’ sales in receivables for Year 2 and Year 1. Round your answers to one decimal place. Assume 365 days per year.

	Number of Days' Sales in Receivables
Year 2	fill in the blank 3 days
Year 1	fill in the blank 4 days

c. The industry average for the accounts receivable turnover is 8.0. How does Olmeck, Inc. compare?

In Year 2 Olmeck was

the industry average. In Year 1, Olmeck was

the industry average.

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