The following data are taken from the financial statements of Colby Company. ________ _ _____________________ 2019

Question:

The following data are taken from the financial statements of Colby Company.

_________ _____________________________2019 2018

Accounts receivable (net), end of year........$ 550,000............$ 540,000

Net sales on account......................................4,300,000............4,000,000

Terms for all sales are 1/10, n/45

(a) Compute for each year (1) the accounts receivable turnover and (2) the average collection period. At the end of 2017, accounts receivable was $520,000.

(b) What conclusions about the management of accounts receivable can be drawn from these data?

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... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...