Analysis of Receivables Presented below is information for Grant Company. 1. Beginning-of-the-year Accounts Receivable balance was $15,000.
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Analysis of Receivables Presented below is information for Grant Company.
1. Beginning-of-the-year Accounts Receivable balance was $15,000.
2. Net sales (all on account) for the year were $100,000. Grant does not offer cash discounts.
3. Collections on accounts receivable during the year were $80,000.
(a) Prepare (summary) journal entries to record the items noted above.
(b) Compute Grant’s accounts receivable turnover ratio for the year. The company does not believe it will have any bad debts.
(c) Use the turnover ratio computed in (b) to analyze Grant’s liquidity. The turnover ratio last year was 7.0.
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For 
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
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