Accounts receivable turnover and days’ sales in receivables Financial statement data for years ending December 31 for Chiro-Solutions Company follow:   20Y2 20Y1 Sales   $2,912,000     $2,958,000   Accounts receivable:                 Beginning of year   300,000     280,000       End of year   340,000     300,000   a. Determine the accounts receivable turnover for 20Y2 and 20Y1. If required, round the final answers to one decimal place.   AccountsReceivableTurnover 20Y2       20Y1         b. Determine the days’ sales in receivables for 20Y2 and 20Y1. Use 365 days, if required round the final answers to one decimal place.   Days’ Salesin Receivables 20Y2      days 20Y1      days   c. Does the change in accounts receivable turnover and the days’ sales in receivables from 20Y1 to 20Y2 indicate a favorable or unfavorable change?

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 turnover and days’ sales in receivables

Financial statement data for years ending December 31 for Chiro-Solutions Company follow:

  20Y2 20Y1
Sales   $2,912,000     $2,958,000  
Accounts receivable:            
    Beginning of year   300,000     280,000  
    End of year   340,000     300,000  

a. Determine the accounts receivable turnover for 20Y2 and 20Y1. If required, round the final answers to one decimal place.

  Accounts
Receivable
Turnover
20Y2      
20Y1      

 

b. Determine the days’ sales in receivables for 20Y2 and 20Y1. Use 365 days, if required round the final answers to one decimal place.

  Days’ Sales
in Receivables
20Y2      days
20Y1      days

 

c. Does the change in accounts receivable turnover and the days’ sales in receivables from 20Y1 to 20Y2 indicate a favorable or unfavorable change?
 

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