6. 10.00 value 10.00 points Shiplt Corporation reported the following rounded am

Question

6. 10.00 value 10.00 points Shiplt Corporation reported the following rounded amounts (in millions): 2013 2012 $ 5,515 $ 5,220 (345) (350) May 31 Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance Net Sales (assume all on credit) 5,170 $ 4,870 $ 42,500 41,000 Required: 1. Determine the receivables turnover ratio and days to collect for 2013. (Use 365 days in a year. Do not round your intermediate calculations. Round your answers to 1 decimal place.) Receivables Turnover Ratio times Days to Collect ay 2. Do the measures calculated in requirement 1 represent an improvement (or decline) in receivables turnover, compared to 2012 when the turnover was 7.0? Improvement O Decline

Explanation / Answer

1) Receivable turnover = Credit sales/average net rerceivable = 42500/5020 = 8.5

Days to collect = 365/Receivable turnover = 365/8.5 = 42.9 Days

2) Yes, Improvement

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