Question
The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. Line Item Description 20Y3 20Y2 20Y1
The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45.
Line Item Description20Y320Y220Y1Accounts receivable, end of year$725,000$660,000$630,000Sales on account5,675,5004,560,500This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet
a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the days' sales in receivables. Assume a 365-day year. Do not round intermediate calculations. Round your answers to one decimal place.
Line Item Description20Y320Y21. Accounts receivable turnoverfill in the blank 2fill in the blank 32. Days' sales in receivablesfill in the blank 4 daysfill in the blank 5 days
b. The collection of accounts receivable has fill in the blank 1 of 3
deterioratedimproved
. This can be seen in both the fill in the blank 2 of 3
decreaseincrease
in accounts receivable turnover and the fill in the blank 3 of 3
decreaseincrease
in the collection period.
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