Martin Kline, engagement partner for RCT Manufacturing Company, a February 28, 1999, year end client, is performing analytical procedures to better understand RCT's business and to determine where audit effort ought to be concentrated. The condensed balance sheet and income statements for 1998 and 1999 follow.

Additional information: 

1. Cash sales are insignificant.

2. Year end figures are comparable to the average for each respective year.

Required: 

For each year, compute accounts receivable turnover and, based on turnover, identify and discuss procedures Kline should include in the audit of accounts receivable.

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RCT Manufacturing Company Condensed Balance Sheets February 28, 1999 and 1998 Assets Cash Accounts receivable, net Inventory Other current assets 1999 $ 12,000 1998 $ 15,000 93,000 50,000 72,000 67,000 5,000 6,000 Plant and equipment, net of Depreciation 60,000 80,000 Total assets $242,000 $218,000 Liabilities and Equities Accounts payable $ 38,000 $ 41,000 Federal income tax payable 30,000 14,400 Long-term liabilities 20,000 40,000 Common stock 70,000 70,000 Retained earnings 84,000 52,600 Total liabilities and equities $242,000 $218,000