AccountingFlanders Corp. (Flanders) is an insurance company with several officesin the Maritime provinces. Excerpts from its statement of financialposition are as follows:Flanders Corp.As at June 3020212020Cash$ 22,350$ 20,400Accounts receivable57,86029,500Prepaid expenses4,7806,890Short-terminvestments78,77598,450$163,765$155,240Additional information:Sales for the year ended June 30, 2021, were $878,00O. Sales for the year endedJune 30, 2020, were $775,000.90% of Flanders' sales are made on credit.The accounts receivable turnover ratio for the year ended June 30, 2020, was16.49.Required:a. Discuss the implications to Flanders of the ratio calculated in part (a), and theimplications of the change in this ratio from the previous year..b. Calculate Flanders' accounts receivable turnover ratio for the year ended June 30,2021.

Accounts receivable turnover ratio (2021) = Net credit sales / Average debtors = 790,200 / 43,680 =…

As at June 30 2021 2020 Cash $ 22,350 $ 20,400 Accounts receivable 57,860 29,500 Prepaid expenses 4,780 6,890 Short-term investments 78,775 98,450 $163,765 $155,240 Additional information: Sales for the year ended June 30, 2021, were $878,000. Sales for the year ended June 30, 2020, were $775,000. 90% of Flanders' sales are made on credit. The accounts receivable turnover ratio for the year ended June 30, 2020, was 16.49. Required: a. Discuss the implications to Flanders of the ratio calculated in part (a), and the implications of the change in this ratio from the previous year.. b. Calculate Flanders' accounts receivable turnover ratio for the year ended June 30, 2021.

As at June 30 2021 2020 Cash $ 22,350 $ 20,400 Accounts receivable 57,860 29,500 Prepaid expenses 4,780 6,890 Short-term investments 78,775 98,450 $163,765 $155,240 Additional information: Sales for the year ended June 30, 2021, were $878,000. Sales for the year ended June 30, 2020, were $775,000. 90% of Flanders' sales are made on credit. The accounts receivable turnover ratio for the year ended June 30, 2020, was 16.49. Required: a. Discuss the implications to Flanders of the ratio calculated in part (a), and the implications of the change in this ratio from the previous year.. b. Calculate Flanders' accounts receivable turnover ratio for the year ended June 30, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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