Question: Blue Inc sells playground equipment to schools and municipalities It

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:

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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