Business
Financial Accounting
The following account balances are taken from the records of

The following account balances are taken from the records of the Faraway Travel Agency: Faraway extends credit

Question:

The following account balances are taken from the records of the Faraway Travel Agency: December 31 2013 2014 2012 Accounts receivable $150,000 $100,000 $80,000 2014 2013 Net credit sales $600,000 $540,000

December 31 2013 2014 2012 Accounts receivable $150,000 $100,000 $80,000 2014 2013 Net credit sales $600,000 $540,000

Faraway extends credit terms requiring full payment in 60 days, with no discount for early payment.

Required
1. Compute Faraway€™s accounts receivable turnover ratio for 2014 and 2013.
2. Compute the number of days€™ sales in receivables for 2014 and 2013. Assume 360 days in a year.
3. Comment on the efficiency of Faraway€™s collection efforts over the two-year period.

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December 31 2013 2014 2012 Accounts receivable $150,000 $100,000 $80,000 2014 2013 Net credit sales $600,000 $540,000

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1 Accounts receivable turnover Net credit salesAverage accounts receivable 2014 6000001500...View the full answer

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Question Posted: Nov 08, 2018 06:57 AM

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