2. Solve this exercise that is in the image below BE18.11 (LO 3) Writing The following data are taken from the financial statements of Colby Company.20202019Accounts receivable (net), end of year$ 550,000$ 540,000Net sales on account4,300,0004,000,000Terms for all sales are 1/10, n/45a. Compute for each year (1) the accounts receivable turnover and (2) the average collection period.At the end of 2018, accounts receivable was $520,000.b. What conclusions about the management of accounts receivable can be drawn from these data?

ACCOUNTS RECEIVABLE TURNOVER : = NET SALES ON ACCOUNT / AVERAGE ACCOUNTS RECEIVABLE FOR 2019 :…

BE18.11 (LO 3) Writing The following data are taken from the financial statements of Colby Company. 2020 2019 $ 550,000 $ 540,000 4,000,000 Accounts receivable (net), end of year Net sales on account 4,300,000 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 2018, accounts receivable was $520,000. b. What conclusions about the management of accounts receivable can be drawn from these data?

BE18.11 (LO 3) Writing The following data are taken from the financial statements of Colby Company. 2020 2019 $ 550,000 $ 540,000 4,000,000 Accounts receivable (net), end of year Net sales on account 4,300,000 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 2018, accounts receivable was $520,000. b. What conclusions about the management of accounts receivable can be drawn from these data?

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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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

2.
Solve this exercise that is in the image below

BE18.11 (LO 3) Writing The following data are taken from the financial statements of Colby Company.
2020
2019
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 2018, accounts receivable was $520,000.
b. What conclusions about the management of accounts receivable can be drawn from these data?

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