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ABC INC. has the following information for its years ended June 30: 2020 2019 2018 Sales revenue $567,800 $650,700 $589,200 Accounts receivable $62,500 $67,500 $53,200
ABC INC. has the following information for its years ended June 30: 2020 2019 2018 Sales revenue $567,800 $650,700 $589,200 Accounts receivable $62,500 $67,500 $53,200 Required: 1. Calculate the accounts receivable turnover (Sales/Average Accounts Receivable) to one decimal place and the average collection period for 2020 and 2019 to the nearest day. Assume a year of 365 days. Show computations. (4 marks) 2020 2019 Accounts receivable turnover Average collection period 2. Comment on the trend in the average collection period. What additional information would an analyst require to properly understand this trend? (4 marks)
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