Accounts Receivable Analysis The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y3 20Y2 20Y1 Accounts receivable, end of year $725,000 $650,000 $600,000 Sales on account 5,637,500 4,687,500 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Y3 20Y2 1. Accounts receivable turnover 3,181,25 X 2,668,75 X 2. Number of days' sales in receivables 44.5 days 48.7 days b. The collection of accounts receivable has improved . This can be seen in both the increase in accounts receivable turnover and the decrease in the collection period. Feedback Check My Work a.1. Divide net sales by average accounts receivable. Average Accounts receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) = 2. a.2. Divide average accounts receivable by average daily sales on account. Average Accounts receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) - 2. Average daily sales on account = Net Sales - 365 days. b. Consider the relationship of the accounts involved. Consider the effects of the changes on the business