The following data are taken from or calculated from the financial statements: CurrentPreceding YearYearAverage accounts receivable (net)$123,000$ 95,000Sales on account950,000825,000(a)Assuming that credit terms on all sales are n/45, determine for each year (1) the accounts receivable turnover and (2) the number of days' sales in receivables.Round intermediate calculations to whole numbers and final answers to two decimal places.(b)Comment on any significant trends revealed by the data.

Solution: A) 1) Accounts receivable turnover = Net Credit sales / Average accounts receivable…

Answered: The following data are taken from or…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 9E

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The following data are taken from or calculated from the financial statements:

	Current	Preceding
	Year	Year
Average accounts receivable (net)	$123,000	$ 95,000
Sales on account	950,000	825,000

(a)	Assuming that credit terms on all sales are n/45, determine for each year (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round intermediate calculations to whole numbers and final answers to two decimal places.
(b)	Comment on any significant trends revealed by the data.

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