Chapter 6, Problem 10QS

a

To determine

Introduction: Customers of a company are crucial parts ofthe cash management system.If the customer delay payments they owe to the company, the company will face difficulties in payments of its obligations. To measure how quickly a company collects cash from its customers, days sales uncollected is determined using the following formula.

  $\text{Days}\text{sales}\text{uncollected=}\frac{\text{Accounts}\text{Receivable}}{\text{Net}\text{sales}}\text{×365}$

The change in the number of days’ sales uncollected between year 1 and year 2.

b

To determine

Introduction: Customers of a company are crucial parts ofthe cash management system, if the customerdelay payments they owe to the company, the company will face difficulties in payments of its obligations, to measure how quickly a company collects cash from its customers, days sales uncollected is determined using the following formula

  $\text{Days}\text{sales}\text{uncollected=}\frac{\text{Accounts}\text{Receivable}}{\text{Net}\text{sales}}\text{×365}$

Whether the collection receivable is improved.