Accounts receivable turnover and days’ sales in receivables For two recent years, Robinhood Company reported the following: Line Item Description 20Y9 20Y8 Sales $7,906,000 $6,726,000 Accounts receivable: Beginning of year 600,000 540,000 End of year 580,000 600,000 a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round your answers to one decimal place. b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Assume 365 days in a year. Round intermediate calculations and final answers to one decimal place.
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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For two recent years, Robinhood Company reported the following:
| Line Item Description | 20Y9 | 20Y8 |
|---|---|---|
| Sales | $7,906,000 | $6,726,000 |
| Accounts receivable: | ||
| Beginning of year | 600,000 | 540,000 |
| End of year | 580,000 | 600,000 |
a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round your answers to one decimal place.
b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Assume 365 days in a year. Round intermediate calculations and final answers to one decimal place.
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