(Compute the accounts receivable turnover ratio and the average collection period for accounts receivable, LO 5) The following information was obtained from Acamac Corp.’s (Acamac) 2004 financial statements:

Required:

a. Calculate Acamac’s accounts receivable turnover ratio for 2004.

b. Calculate the average collection period for accounts receivable during 2004.

c. Is Acamac’s average collection period for 2004 reasonable? What information would you require to answer this question? Explain.

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Sales (all sales are on credit) Accounts receivable on December 31, 2004 Accounts receivable on December 31, 2003 $3,234,000 410,000 375,000