A firm has beginning A/R of $50,000 with an Allowance for Doubtful Accounts of S2500. At the end of the accounting period (one year) the amount of A/R is $555,000 with an Allowance for Doubtful Accounts of $2650. During the year the firm had net credit sales of $119,000. Calculate the accounts receivables turnover ratio using the equation, Net Credit Sales + Avg Net A/R Turnover Net Credit Sales + A/R Beginning + A/R End/2 - A/R Turnover Calculate the average collection period in days using the equation, Days in Year + A/R Turnover - Avg.Collection Period Note: Assume 365 operating days for the year. If the firm tightens its credit terms and collection policies what do you think will happen to A/R Turnover? What will happen to the average collection period? Is there a downside to making the change suggested in #3? For each of the items shown below, indicate whether the account is permanent or closed at the end of the period, and whether it is a "contra" account. Also indicate for permanent accounts whether it belongs on the asset portion of the balance sheet or on the liabilities and owner's capital portion. Cash Accounts Receivable Inventory Accounts Payable Notes Payable Notes Receivable Long-term Debt Accumulated Depreciation Owner's Drawings Owner's Capital Sales Revenue Salaries & Wages Expense Supplies Expense Cost of Goods Sold Allowance for Doubtful Accounts Income Statement Other Expenses Rent Expense Equipment