Blue, Inc., sells playground equipment to schools and municipalities. It mails invoices at the end of each month for all goods shipped during that month; credit terms are net 30 days. Sales and accounts receivable data for 2014, 2015, and 2016 follow:

Required:
1. Calculate the rates of increase in sales and in receivables during 2015 and 2016.
2. Do your calculations indicate any potential problems with Blue€™s receivables?
3. If so, suggest a possible explanation for your findings and indicate what action, if any, would then be needed to bring Blue€™s financial statements into conformity withGAAP.

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Years Ending December 31, 2015 S1,839,559 2014 2016 Sales Accounts receivable at year-end $1,785,980 $1,986,724 267,094 220,189 227,896