Accounts Receivable Analysis The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y2 20Y3 Accounts receivable, end of year $725,000 5,637,500 Sales on account a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 1. Accounts receivable turnover 2. Number of days' sales in receivables b. The collection of accounts receivable has $650,000 4,687,500 20Y1 $600,000 20Y3 20Y2 days This can be seen in both the days in accounts receivable turnover and the in the collection period.
Accounts Receivable Analysis The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y2 20Y3 Accounts receivable, end of year $725,000 5,637,500 Sales on account a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 1. Accounts receivable turnover 2. Number of days' sales in receivables b. The collection of accounts receivable has $650,000 4,687,500 20Y1 $600,000 20Y3 20Y2 days This can be seen in both the days in accounts receivable turnover and the in the collection period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
tres
Transcribed Image Text:Accounts Receivable Analysis
The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45.
20Y3
20Y2
$725,000 $650,000
5,637,500 4,687,500
20Y1
$600,000
a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a
365-day year.
Accounts receivable, end of year
Sales on account
1. Accounts receivable turnover
2. Number of days' sales in receivables
b. The collection of accounts receivable has
20Y3
20Y2
days
This can be seen in both the
days
in accounts receivable turnover and the
in the collection period.
Expert Solution
Step 1 Introduction
The account receivables are the current assets of the business that owes money to the business.
The account receivables turnover ratio tells about the number of days taken by the business to convert its account receivables into cash.
Account receivables turnover ratio = Credit sales ÷ Account receivables
Number of days sales in account receivables = Number of days in a year ÷ Account receivables turnover ratio
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education