Accounts Receivable Analysis The following data are taken from the financial sta

Question

Accounts Receivable Analysis

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

a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round answers to one decimal place. Assume a 365-day year.

b. The collection of accounts receivable has improved . This can be seen in both the increase in accounts receivable turnover and the decrease in the collection period.

20Y3 20Y2 20Y1 Accounts receivable, end of year $163,800 $172,000 $178,400 Sales on account 1,158,510 1,068,720

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars 20Y3 20Y2 Beginning Accounts receivable                    172,000.00                    178,400.00 Ending Accounts receivable                    163,800.00                    172,000.00 Average Accounts receivable                    167,900.00                    175,200.00 Sales on account                1,158,510.00                1,068,720.00 accounts receivable turnover = Sales on Account/Average Accounts receivable                                 6.90                                 6.10 number of days' sales in receivables. = 365/ Average Accounts receivable                               52.90                               59.84 b) The collection of accounts receivable has improved . This can be seen in both the increase in accounts receivable turnover and the decrease in the collection period. Thus the company performace has improved

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