Question

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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  • CreatedSeptember 10, 2014
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