Analyzing changes in accounts receivable. The financial statements and notes for Polaris Corporation reveal the following for

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Analyzing changes in accounts receivable. The financial statements and notes for Polaris Corporation reveal the following for the four years ending in March 2005-2008 (amounts in millions of dollars):


2006 2007 2008 2005 Total Sales... $4,295.4 $3,746.3 $3,305.4 40.1 $4,880.1 Bad Debt Expense. 20.1 36.8 20.1 End of Marc


Assume that Polaris's credit sales as a percent of total sales was 75% in each year.
a. Compute the amount of accounts written off as uncollectible during 2005-2008.
b. Compute the amount of cash collections from credit customers during each of the four years ending in March 2005-2008.
c. Compute the total amount of cash collected from customers during each of the four years ended March 2005-2008.
d. Calculate the accounts receivable turnover ratio for the years ended March 2005-2008. Use total sales in the numerator and average accounts receivable, net, in thedenominator.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

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