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Accounts Receivable Turnover and Days' Sales in Receivables Classic Company designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products.
Accounts Receivable Turnover and Days' Sales in Receivables Classic Company designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company's products include such brands as Polo by Classic, Classic Purple Label, Classic, Polo Jeans Co., and Chaps. Polo Classic reported the following for two recent years: Sales Accounts receivable For the Period Ending. Year 2 $5,168,400 635,100 Assume that accounts receivable were $584,000 at the beginning of Year 1. Year 1 $5,150,150 657,000 a. Compute the accounts receivable turnover for Year 2 and Year 1. Round your answers to two decimal places. Year 2: Year 1: b. Compute the days' sales in receivables for Year 2 and Year 1. Round your final answers to one decimal place. Use 365 days per year in your calculations. Year 2: Year 1: days days c. The change in the accounts receivable turnover from year 1 to year 2 indicates a(n) decrease receivable and is a(n) unfavorable in the efficiency of collecting accounts change. The change in the days' sales in receivables is a(n) unfavorable change.
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