The following information was taken from the 2021 financial statements of Clarke Ltd. Description Accounts Receivable...
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The following information was taken from the 2021 financial statements of Clarke Ltd. Description Accounts Receivable Allowance for Doubtful Debts Net Sales Total Current Assets Year 2021 (in millions) $ 150.0 6.3 REQUIRED: 1200.0 367.2 Year 2020 (in millions) $110.0 5.7 950.0 285.8 1. Comment on the entity's credit and collection policies. All sales are on credit. The industry average credit risk ratio is 3.5% and the industry average collection period is 35 days. The industry averages have been constant during 2020 and 2021. Year 2019 (in millions) $126.0 8.3 1. Calculate the credit risk ratio for the entity for 2020 and 2021. 810.0 258.7 1. Calculate the receivables turnover and average collection period for 2020 and 2021 for the entity. The following information was taken from the 2021 financial statements of Clarke Ltd. Description Accounts Receivable Allowance for Doubtful Debts Net Sales Total Current Assets Year 2021 (in millions) $ 150.0 6.3 REQUIRED: 1200.0 367.2 Year 2020 (in millions) $110.0 5.7 950.0 285.8 1. Comment on the entity's credit and collection policies. All sales are on credit. The industry average credit risk ratio is 3.5% and the industry average collection period is 35 days. The industry averages have been constant during 2020 and 2021. Year 2019 (in millions) $126.0 8.3 1. Calculate the credit risk ratio for the entity for 2020 and 2021. 810.0 258.7 1. Calculate the receivables turnover and average collection period for 2020 and 2021 for the entity.
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To calculate the receivables turnover and average collection period for 2020 and 2021 we can use the following formulas Receivables Turnover Net Sales ... View the full answer
Related Book For
Accounting Business Reporting For Decision Making
ISBN: 9780730302414
4th Edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
Posted Date:
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