Accounts Receivable Turnover For the Year 2 and Year 1, Classic Company reported the following: Year 2 Year 1 Sales $7,018,220 Accounts receivable 770,150 Assume that the accounts receivable were $646,050 at the beginning of Year 1. $6,867,840 755,550 Rosco Co reported the following: Year 2 Year 1 Sales $1,900,920 $1,985,600 Accounts receivable 222,650 229,950 Assume that accounts receivable were $266,450 at the beginning of Year 1. Accounts receivable turnover ratios Year 2 Year 1 Classic Company 9.2 9.8 Rosco Co. 8.4 B a. Compute the average accounts receivable turnover ratio for Classic Company and Rosco Co. for Year 2 and Year 1. Round to one decimal place. Classic Company Rosco Co. 5.4 8 . Compute the average accounts receivable turnover ratio for Classic Company and Rosco Co. for Year 2 and Year 1. Round to one decimal place. Cassie Company: Rosco Cot b. Does Classic Company or Rosco Co have the higher average accounts receivable turnover ratio? has the higher average accounts receivable turnover ratio. c. Explain why the average turnover ratios are different in (b). Classic Company operates a specialty retail chain of stores that sells directly to individual consumers. Many of these consumers (retail customers) pay using MasterCard OF VISA, which is recorded as cash sales. In contrast, Rosco manufactures foods that are sold to food wholesalers, grocery store chains, and other food distributors that eventually sell Rosco's products to individual consumers. Accordingly, because of the extended distribution chain, we would expect Rosco to have accounts receivable than Classic. In addition, we would expect Rosco's business customers to take a period to pay their receivables. Thus, we would expect Rosco's average accounts receivable turnover ratio to be than Classic