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Accounts Receivable Analysis The following data are taken from the financial statements of Outdoor Patio Inc. Terms of all sales are 2/10, n/60 Year 2
Accounts Receivable Analysis The following data are taken from the financial statements of Outdoor Patio Inc. Terms of all sales are 2/10, n/60 Year 2 $128,000 840,960 Year 1 Year 3 $120,200 868,700 Accounts receivable, end of year Sales 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. $134,800 Year 3 Year 2 1. Accounts receivable turnover 2. Number of days' sales in receivables b. What conclusion can be drawn from these data concerning accounts receivable and credit policies? days days The collection of accounts receivable has This can be seen in the in accounts receivable turnover and the in the collection period. The company either became aggressive in collecting accounts receivable or restrictive in granting credit to customers in Year 3
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