Kerwick Company had accounts receivable of $123,200 on January 1, 2017. The only
ID: 2510154 • Letter: K
Question
Kerwick Company had accounts receivable of $123,200 on January 1, 2017. The only transactions that affected accounts receivable during 2017 were net credit sales of $1,282,600, cash collections of $1,201,700, and accounts written off of $30,000 Your answer is incorrect. Try again. Compute the ending balance of accounts receivable. Ending balance of accounts receivable Your answer Your answer is incorrect. Try again. Compute the accounts receivable turnover for 2017. (Round answer to 2 decimal places, e.g. 2.50.) Accounts receivable turnover Your answer is incorrect. Try again. Compute the average collection period in days. (Round answer to 1 decimal place, e.g. 2.5. Use 365 days for calculations. Average collection period 65 days for calculations)Explanation / Answer
1. Beginning Accounts Receivable = 123,200
Net Credit Sales = 1,282,600
cash Collections = 1,201,700
Accounts Written off = 30,000
1 Ending Balance of Accounts receivable = 174100
Beginning Account Receivable = 123,200
add: Net Credit sales 1,282,600
1,405,800
less: Cash collections 1,201,700
204,100
Less; Accounts Written off 30,000
Ending Accounts Receivable 174,100
2. Acccounts receivable turnover for 2017
Formula = Net Credit Sales/ Average Accounts Receivable
= 1,282,600 /(123,200 +174,100)/2 =1,282,600 / 148,650 = 8.62832 = 8.6
3. Average Collection Period = Number of days in a year /Accounts receivable turnover
= 365 /8.6 = 42.4418 = 42.4 days
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