Question #6 (8 marks)

ABC INC. has the following information for its years ended June 30:

	2020	2019	2018
Sales revenue	$567,800	$650,700	$589,200
Accounts receivable	$62,500	$67,500	$53,200

Required:

1. Calculate the accounts receivable turnover (Sales/Average Accounts Receivable) to one decimal place and the average collection period for 2020 and 2019 to the nearest day. Assume a year of 365 days. Show computations. (4 marks)

	2020	2019
Accounts receivable turnover
Average collection period

2. Comment on the trend in the average collection period. What additional information would an analyst require to properly understand this trend? (4 marks)