A recent annual report for NPS contained the following data:(dollars in thousands)Previous YearCurrent Year$ 4,517,000150,000$4,367,000$3,617,000183,000Accounts receivableLess: Allowance for doubtful accounts$3,434,000Net accounts receivable$ 35,797,000Net sales (assume all on credit)Required:1. Determine the receivables turnover ratio and average days sales in receivables for the current year. (Use 365 days a year. Do notround intermediate calculations. Enter your answers in thousands not in dollars.)Receivables Turnover RatioNumerator0 timesDenominatorAverage Days Sales in ReceivablesNumeratorO daysDenominator

Question
Asked Oct 17, 2019
A recent annual report for NPS contained the following data:
(dollars in thousands)
Previous Year
Current Year
$ 4,517,000
150,000
$4,367,000
$3,617,000
183,000
Accounts receivable
Less: Allowance for doubtful accounts
$3,434,000
Net accounts receivable
$ 35,797,000
Net sales (assume all on credit)
Required:
1. Determine the receivables turnover ratio and average days sales in receivables for the current year. (Use 365 days a year. Do not
round intermediate calculations. Enter your answers in thousands not in dollars.)
Receivables Turnover Ratio
Numerator
0 times
Denominator
Average Days Sales in Receivables
Numerator
O days
Denominator
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A recent annual report for NPS contained the following data: (dollars in thousands) Previous Year Current Year $ 4,517,000 150,000 $4,367,000 $3,617,000 183,000 Accounts receivable Less: Allowance for doubtful accounts $3,434,000 Net accounts receivable $ 35,797,000 Net sales (assume all on credit) Required: 1. Determine the receivables turnover ratio and average days sales in receivables for the current year. (Use 365 days a year. Do not round intermediate calculations. Enter your answers in thousands not in dollars.) Receivables Turnover Ratio Numerator 0 times Denominator Average Days Sales in Receivables Numerator O days Denominator

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check_circleExpert Solution
Step 1

Accounts Receivable Turnover represents the efficiency of the company to convert its Accounts receivable into cash.

Accounts Receivable Turnover = Net Credit Sales ÷ Average Accounts Receivable

Average Accounts Receivable = (Opening AR + Closing AR ) ÷ 2

The Gross Accounts Receivable value is considered for computing the turnover ratio and turnover in days ratio.

Accounts Receivable Turnover in Days =  365 ÷ AR Turnover Ratio

Step 2

Computation of Ratio - Working

S
U
8
Computation of Ratios
Value
10 Particulars
Formula
Ratio
Receivable Turnover Ratio
11
Net Credit Sales
35797000
12 Numerator
13 Denominator Average Accounts Receivable (3617000+451700=T12/T13
14
Average Days Sales in Receivable
No of Days
15
16 Numerator
17 Denominator AR Turnover Ratio
365
- T16/ T17
U12
18
19
20
21
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S U 8 Computation of Ratios Value 10 Particulars Formula Ratio Receivable Turnover Ratio 11 Net Credit Sales 35797000 12 Numerator 13 Denominator Average Accounts Receivable (3617000+451700=T12/T13 14 Average Days Sales in Receivable No of Days 15 16 Numerator 17 Denominator AR Turnover Ratio 365 - T16/ T17 U12 18 19 20 21

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Step 3

Computation of...

R
S
T
U
8
Computation of Ratios
Formula
9
10 Particulars
Value
Ratio
Receivable Turnover Ratio
11
Net Credit Sales
Average Accounts Receivable
35797000
12 Numerator
13 Denominator
4067000 8.80182
14
Average Days Sales in Receivable
No of Days
AR Turnover Ratio
15
16 Numerator
17 Denominator
365
8.801819523 41.4687
18
19
20
help_outline

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R S T U 8 Computation of Ratios Formula 9 10 Particulars Value Ratio Receivable Turnover Ratio 11 Net Credit Sales Average Accounts Receivable 35797000 12 Numerator 13 Denominator 4067000 8.80182 14 Average Days Sales in Receivable No of Days AR Turnover Ratio 15 16 Numerator 17 Denominator 365 8.801819523 41.4687 18 19 20

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