Business
Accounting
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 2017 and 2016.
2. Compute the number of days' sales in receivables for 2017 and 2016. 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 2017 $150,000 2017 $600,000 il Accounts receivable $100,000 2016 $540,000 $80,000 Net credit sales

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1 Accounts receivable turnover Net credit salesAverage accounts receivable 2017 6000001500...View the full answer

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Using Financial Accounting Information The Alternative to Debits and Credits

ISBN: 978-1337491471

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Authors: Gary A. Porter, Curtis L. Norton

Question Posted: Jun 20, 2017 08:54 AM

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