The following information below relates to Corvid Company for 2020:

• The beginning of the year net Accounts Receivable balance was $123,000.

• Net sales for the year were $1,865,000. Credit sales were 54.8% of the total sales and no cash discounts are offered.

• Collections on accounts receivable during the year were $863,260, and uncollectible accounts written off in 2020 were $12,500. The AFDA account ending balance for 2020 needed no further adjustment for estimated uncollectible accounts at year-end.

Required:

a. Calculate Corvid Company’s accounts receivable turnover ratio for the year. How old is the average receivable?

b. Use the turnover ratio calculated in part

(a) to analyze Corvid Company’s liquidity.
The turnover ratio last year was 5.85.