Kimbrel Corp. significantly reduced its requirements for credit sales. As a result, sales during the current year
Question:
Kimbrel Corp. significantly reduced its requirements for credit sales. As a result, sales during the current year increased dramatically. It had receivables at the beginning of the year of $38,000 and ending receivables of $191,000. Credit sales were $380,000.
Instructions
(a) Determine cash collections during the period.
(b) Discuss how your findings in part (a) would affect Kimbrel Corp.’s quality of earnings ratio. (Do not compute.)
(c) What concerns might you have regarding Kimbrel’s accounting?
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Related Book For
Accounting Tools for Business Decision Making
ISBN: 978-1118128169
5th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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