S5-15. (Learning Objective 5: Evaluating the current ratio and days’ sales in receivables)

West Highland Clothiers reported the following amounts in its 20X7 financial statements. The 20X6 amounts are given for comparison.

Requirements 1. Compute West Highland’s current ratio at the end of 20X7. Round to two decimal places.
2. Compute West Highland’s receivables collection period for 20X7.

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20X7 20X6 Current assets: Cash.. Short-term investments.. $ 10,200 $ 9,700 19,000 14,000 Accounts receivable..... $86,000 $77,000 Less: Allowance for uncollectibles....... (6,400) 79,600 (6,100) 70,900 Inventory... Prepaid insurance. Total current assets. Total current liabilities. Net sales........... 189,000 190,500 2,400 2,300 300,200 287,400 103,000 111,000 852,000 736,000