Presented below is information for Ayayai Company. 1. Beginning-of-the-year Accounts Receivable balance was $23,100. 2. Net sales (all on account) for the year were $104,700. Ayayai does not offer cash discounts. 3. Collections on accounts receivable during the year were $85,400. Ayayai is planning to factor some accounts receivable at the end of the year. Accounts totaling $13,900 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,075. Compute Ayayai’s accounts receivable turnover for the year, assuming the receivables are sold. (Round answers to 2 decimal places, e.g. 4.57.) Accounts receivable turnover ______________ times Days to collect accounts receivable ______________ days
Presented below is information for Ayayai Company. 1. Beginning-of-the-year Accounts Receivable balance was $23,100. 2. Net sales (all on account) for the year were $104,700. Ayayai does not offer cash discounts. 3. Collections on accounts receivable during the year were $85,400. Ayayai is planning to factor some accounts receivable at the end of the year. Accounts totaling $13,900 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,075. Compute Ayayai’s accounts receivable turnover for the year, assuming the receivables are sold. (Round answers to 2 decimal places, e.g. 4.57.) Accounts receivable turnover ______________ times Days to collect accounts receivable ______________ days
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Presented below is information for Ayayai Company.
| 1. | Beginning-of-the-year |
|
| 2. | Net sales (all on account) for the year were $104,700. Ayayai does not offer cash discounts. | |
| 3. | Collections on accounts receivable during the year were $85,400. |
Ayayai is planning to factor some accounts receivable at the end of the year. Accounts totaling $13,900 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,075.
Compute Ayayai’s accounts receivable turnover for the year, assuming the receivables are sold. (Round answers to 2 decimal places, e.g. 4.57.)
| Accounts receivable turnover | ______________ | times | |
| Days to collect accounts receivable | ______________ | days |
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