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.