Lowrate Communications is in the cellular telephone industry. The following selected information has been compiled for the company (in thousands of dollars):

Required

a. In each of the three years presented, what percentage of the company’s total accounts receivable is estimated to be uncollectible?

b. In each of the three years presented, what percentage of the sales revenue is the bad debts expense?

c. Did Lowrate’s collection of accounts receivable improve or deteriorate over this three-year period?

d. What was Lowrate’s average collection period for 2020? Has this improved over the prior year?

Transcribed Image Text:

2020 2019 2018 $ 1,230.6 121.9 Accounts receivable (net) Allowance for doubtful accounts Accounts written off Bad debts expense $ 1,469.8 128.9 305.4 312.4 $ 1,044.8 118.0 296.8 267.6 271.5 267.0 11,367.8 Sales revenue (all on account) 12,661.8 10,420.0