The following data are taken from the financial statements of Tall Tail Company.

_ 2007 ue z006, =

Accounts receivable (net), end of year $ 560,000 $ 540,000 Net sales on account 4,700,000 4,000,000 Terms for all sales are 1/10, n/45.

Compute for each year

(a) the receivables turnover ratio and

(b) the average collection period. What conclusions about the management of accounts receivable can be drawn from these data? At the end of 2005, accounts receivable was $500,000.