Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 $182,600 $197,000 $211,800
Sales 1,233,700 1,205,960

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

declinedimproved

. This can be seen in the

decreaseincrease

in accounts receivable turnover and the

increasereduction

in the collection period. The company either became

lessmore

aggressive in collecting accounts receivable or

lessmore

restrictive in granting credit to customers in Year 3.

.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISO 13485 Auditing Journal Notes Checklists Observations Evidence Log

Authors: Just Visualize It, The Quality Guy

1st Edition

B08W7SNPGP, 979-8706121884

More Books

Students also viewed these Accounting questions

Question

2. Describe why we form relationships

Answered: 1 week ago

Question

5. Outline the predictable stages of most relationships

Answered: 1 week ago