P3-14 Accounts receivable management The table below shows that Blair Supply had an end-of-year accounts receivable balance of $300,000. The table also shows how much of the receivables balance originated in each of the previous 6 months. The company had annual sales of $2.4 million, and it normally extends 30-day credit terms to its customers. Month of origin July August September October November December Year-end accounts receivable Accounts receivable $ 3,875 2,000 34,025 15,100 52,000 193,000 $300,000

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 informa- tion affect the validity of your conclusion in part a? Explain.

3-14 Accounts receivable management The table below shows that Blair Supply had an end-of-year accounts receivable balance of $300,000. The table also shows how much of the receivables balance originated in each of the previous 6 months. The company had annual sales of \$2.4 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 information affect the validity of your conclusion in part a? Explain