The following are excerpts from the financial statements of 2018 and 2019 of Mandela Corporation. 2019 2018 Sales $187,600 $195,000 Accounts Receivable (net): Beginning of Year 68,100 66,500 End of Year 60,200 68,100 A newly hired manager has started implementing new credit policies. Required: As a consultant, you are contracted to analyze Accounts Receivable Turnover and Number of Days’ Sales in Receivable and provide opinion as to whether Mandela’s credit policy changes are working What conclusions does your analysis suggest. Are the new credit policies working ?

1. Accounts Receivable Turnover ratio= Net sales/Average Accounts receivable 2.No. Of days sales…

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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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The following are excerpts from the financial statements of 2018 and 2019 of Mandela Corporation.

2019 2018

Sales $187,600 $195,000

Accounts Receivable (net):

Beginning of Year 68,100 66,500

End of Year 60,200 68,100

A newly hired manager has started implementing new credit policies.

Required:

As a consultant, you are contracted to analyze Accounts Receivable Turnover and Number of Days’ Sales in Receivable and provide opinion as to whether Mandela’s credit policy changes are working

What conclusions does your analysis suggest. Are the new credit policies working ?

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