Question: 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
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):
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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.
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 March 2006 $ 599.2 2008 2007 2005 2004 Accounts Receivable, Gross... Less: Allowance for Uncollectible Accaunts Accounts Receivable, Net .. $ 605.6 $ 566.7 $539.5 $ 680.4 (115.0) $ 484.2 (172.0) $ 508.4 (138.1) $ 467.5 (111.0) $ 455.7 (97.8) $441.7
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