Accounts Receivable AnalysisThe following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30. Year 3Year 2Year 1Accounts receivable, end of year$ 450,000 $ 375,000 $300,000 Sales2,640,000 1,957,500 a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2) the days' sales in receivables. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place. Year 3 Year 2 1. Accounts receivable turnoverfill in the blank 1 fill in the blank 2 2. Number of days' sales in receivablesfill in the blank 3daysfill in the blank 4daysb. What conclusion can be drawn from these data concerning accounts receivable and credit policies?The collection of accounts receivable has . This can be seen in the in accounts receivable turnover and the in the collection period. The company either became aggressive in collecting accounts receivable or restrictive in granting credit to customers in Year 3.

Formula; Accounts receivables turnover=Credit SaleAverage accounts receivables

Answered: The following data are taken from the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 9E

See similar textbooks

Related questions

Question

Accounts Receivable Analysis

The following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30.

	Year 3	Year 2	Year 1
Accounts receivable, end of year	$ 450,000		$ 375,000	$300,000
Sales	2,640,000		1,957,500

a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2) the days' sales in receivables. Assume there are 365 days in the year. Round intermediate calculations to the nearest whole dollar and final answers to one decimal place.

	Year 3		Year 2
1. Accounts receivable turnover	fill in the blank 1		fill in the blank 2
2. Number of days' sales in receivables	fill in the blank 3	days	fill in the blank 4	days

b. What conclusion can be drawn from these data concerning accounts receivable and credit policies?
The collection of accounts receivable has . This can be seen in the in accounts receivable turnover and the in the collection period. The company either became aggressive in collecting accounts receivable or restrictive in granting credit to customers in Year 3.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions