For two recent years, Rosco Co. reported the following: Year 2 Year 1 Sales $6,517,440 $6,167,040 Accounts
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Question:
Year 2 | Year 1 | |||
Sales | $6,517,440 | $6,167,040 | ||
Accounts receivable | 708,100 | 693,500 |
Assume that the accounts receivable were $423,400 at the beginning of Year 1.
a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.
Year 2: | |
Year 1: |
b. Compute the days' sales in receivables at the end of Year 2 and Year 1. Use 365 days per year in your calculations. Round to one decimal place.
Year 2: | days |
Year 1: | days |
c. The change in the accounts receivable turnover from year 1 to year 2 indicates a(n) decrease in the efficiency of collecting accounts receivable and is a(n) unfavorable trend. The change in the days' sales in receivables indicates a(n) unfavorable trend.
Related Book For
Corporate Financial Accounting
ISBN: 978-1337272124
15th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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