Accounts Receivable Analysis

The following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30.

	Year 3		Year 2		Year 1
Accounts receivable, end of year	$113,600		$120,000		$128,200
Sales	735,840		707,370

a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place.

	Year 3		Year 2
1. Accounts receivable turnover	fill in the blank 1		fill in the blank 2
2. Number of days' sales in receivables	fill in the blank 3	days	fill in the blank 4	days

b. What conclusion can be drawn from these data concerning accounts receivable and credit policies? The collection of accounts receivable has

. This can be seen in thein accounts receivable turnover and thein the collection period. The company either becameaggressive in collecting accounts receivable orrestrictive in granting credit to customers in Year 3.