2017 2016 2017 2016 LINK TO TEXT 2017 2016 The following data are taken from the

Question

2017

2016

2017

2016

LINK TO TEXT

2017

2016

The following data are taken from the financial statements of Ivanhoe Company.

2017

2016

Accounts receivable (net), end of year $ 552,300 $ 552,500 Net sales on account 4,552,000 3,917,000 Terms for all sales are 1/10, n/45 Compute for each year the accounts receivable turnover. At the end of 2015, accounts receivable was $481,500. (Round answers to 1 decimal place, e.g. 12.5.)

2017

2016

Accounts receivable turnover

times

times

LINK TO TEXT

Compute for each year the average collection period. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)

2017

2016

Average collection period

days

days

Explanation / Answer

Answer:- 1)-Accounts receivable turnover ratio:-

= Net credit sales/Average accounts receivable

2017 = $4552000/($552500+$552300/2)

= $4552000/$552400

= 8.2 times

2016 = $3917000/($481500+$552500/2)

= $3917000/$517000

= 7.6 times

2)-Average collection period =Number of working days/ Accounts receivable turnover ratio

2017= 365 days/8.2 times =44.5 days

2017= 365 days/7.6 times =48 days

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