eBook Show Me HOW Accounts Receivable Analysis The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, 1/45. 2013 2012 2011 Accounts receivable, end of year $190,200 $204,000 $219,400 Sales on account 1,359,990 1,291,370 a. For 2012 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round answers to one decimal place. Assume a 365-day year. 2013 20Y2 1. Accounts receivable turnover 0.14 X days days 2. Number of days' sales in receivables This can be seen in both the increase in accounts receivable b. The collection of accounts receivable has improved turnover and the decrease in the collection period. Feedback Check My Work a.1. Divide net sales by average accounts receivable. Average Accounts receivable - (Beginning Accounts Receivable Ending Accounts Receivable) -2 a 2. Divide average accounts receivable by average dally sales on account Average Accounts receivable (Beginning Accounts Receivable Ending Accounts Receivable) -2. Average daily sales on account - Net Sales + 365 days b. Consider the relationship of the accounts involved Consider the effects of the changes on the business Learning Objective 3