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The following account balances are taken from the records of

The following account balances are taken from the records of the Faraway Travel Agency: Faraway extends credit

Question:

The following account balances are taken from the records of the Faraway Travel Agency:

Faraway extends credit terms requiring full payment in 60 days, with no discount for early payment.
Required
1. Compute Faraway's accounts receivable turnover ratio for 2012 and 2011.
2. Compute the number of days' sales in receivables for 2012 and 2011. Assume 360 days in a year.
3. Comment on the efficiency of Faraway's collection efforts over the two-year period.

Transcribed Image Text:

December 31 2011 $150,000 $100,000 $80,000 2011 2012 2010 Accounts receivable 2012 Net credit sales $600,000 $540,000

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1 Accounts receivable turnover Net credit salesAverage accounts receivable 2012 60000015...View the full answer

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Using Financial Accounting Information The Alternative to Debits and Credits

ISBN: 978-1111534912

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Authors: Gary A. Porter, Curtis L. Norton

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Question Posted: Nov 25, 2016 11:40 AM

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