Accounts Recelvable 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: For the Period Ending Year 2 Year 1 Sales $5,242,130 $5,256,000 Accounts receivable 598,600 620,500 Assume that accounts receivable were $547,500 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place. 5.8 X Year 2: 6.1 X Year 1: b. Compute the days' sales in receivables for Year 2 and Year 1. Round to one decimal place. Use 365 days per year in your calculations. 63.3 X days Year 2: 59.6 X days Year 1: in the efficiency of collecting accounts receivable and is a(n) c. The change in the accounts receivable turnover from year 1 to year 2 indicates a(n) increase X change. change. The change in the days' sales in receivables is a(n) unfavorable favorable X Feedback Check My Work The Accounts receivable turnover is a ratio of Sales to Average accounts receivable. The number of Days' Sales in Receivables is a ratio of Average accounts receivable to Average daily sales. Consider the components of the ratios. Consider whether changes reflect efficiency. A increasing accounts receivable turnover indicates a favorable trend, while an increasing days' sales in receivables indicates an unfavorable trend