Question
Month of Amounts receivable origin July $3,860 August 2,015 September 34,020 October 15,080 November 52,030 December 192,985 Year-end accounts receivable 299,990 This table, shows that
Month of Amounts receivable origin
July $3,860
August 2,015
September 34,020
October 15,080
November 52,030
December 192,985
Year-end accounts receivable 299,990
This table, shows that Blair Supply had an end-of-year accounts receivable balance of $299,990.The table also shows how much of the receivables balance originated in each of the previous six months. The company had annual sales of $2.40 million and it normally extends 30-day credit terms to its customers.
a. Use the year-end total to evaluate the firm's collection system.
b. If 70% of the firm's sales occur between July and December, would this affect the validity of your conclusion in part a? Explain.
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