Accounts receivable analysisThe following data arc taken from the financial .statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y320Y220Y1Accounts receivable, end of year$ 725,000$ 650,000$600,000Sales on account5,637,5004,687,500 A. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. (Round to the nearest dollar and one decimal place)B. What conclusions can be drawn from these data concerning accounts receivable and credit policies?

Accounts Receivables Turnover = Sales Revenue/Average Accounts Receivables Days sales in Receivables…

Answered: Accounts receivable analysisThe…

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

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Accounts receivable analysis
The following data arc taken from the financial .statements of Sigmon Inc. Terms of all sales are 2/10, n/45.

	20Y3	20Y2	20Y1
Accounts receivable, end of year	$ 725,000	$ 650,000	$600,000
Sales on account	5,637,500	4,687,500

A. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and
(2) the number of days' sales in receivables. (Round to the nearest dollar and one decimal place)
B. What conclusions can be drawn from these data concerning accounts
receivable and credit policies?

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