Part 2 Below..

Evaluating Accounts Receivable Performance Companies offer trade credit to make it easier for customers to do business with them but how can a company check whether receivables are being paid in a timely fashion? Imagine that a company has terms of "Net 30" - we would expect most receivables to be paid close to 30 days. How can we check? And can we tell if it's getting worse? quired Compute the 'days sales in receivables' for 2021 using the formula below, then click on the tab at bottom to go to part 2 of the worksheet and do the same for 2020. The computation for "Days Sales in AR" for 2020 is the "part 2" tab at bottom. The following data is taken from the records of Mom \& Pop Inc. Calculate "average Accts Receivable" for 2021 add the ending AR for 2021 plus the ending AR of 2020, then divide by 2 Calculate "average Daily Sales" for 2021 take the total sales for 2021 , divide by 365 days to get a "daily average" Net Sales 2021 Avg Dly Sales divide by 365 Divide Average AR (from step 1) by Avg Daily Sales (from step 2) to get "Days Sales in AR" Use the tab at bottom to go to "Week 13 Lab part 2" \& calculate the formula for 2020 . Which is better? Calculate "Days Sales in Accounts Receivable" for 2020 Compute the 'days sales in receivables' for 2020 , using the formula below. Compare the results for 2020 and 2021 - which is better? The computation for "Days Sales in AR" for 2021 is "part 1" tab at bottom. The following data is taken from the records of Mom \& Pop Inc. Calculate "average Accts Receivable" for 2020 add the ending AR for 2020 plus the ending AR of 2019 , then divide by 2 2 Calculate "average Daily Sales" for 2020 take the total sales for 2020 , divide by 365 days to get a "daily average" Net Sales 2020 Ava Dlv Sales divide by 365 3 Divide Average AR (from step 1) by Avg Daily Sales (from step 2) to get "Days Sales in AR" Davs Sls in AR Days Sales in Receivables = Avg Accts Rec = Avg Daily Sls 4 What was Average Daily Sales in Accts Receivable for 2021? What was Average Daily Sales in Accts Receivable for 2021? Which year was the company doing a better job of collecting AR