### Financial Statement Analysis: Sigmon Inc.**Terms of Sales:** 2/10, n/45.**Data Overview:**The following data are taken from the financial statements of Sigmon Inc. The table lists the accounts receivable at the end of the year and the sales on account over three fiscal years.| Year | Accounts Receivable, End of Year | Sales on Account ||-------|----------------------------------|------------------------|| 20Y3 | $725,000 | $5,637,500 || 20Y2 | $650,000 | $4,687,500 || 20Y1 | $600,000 | |**Analysis Task:**The objective is to determine for the years 20Y2 and 20Y3:1. **Accounts Receivable Turnover**2. **Number of Days' Sales in Receivables**Calculations should be rounded to the nearest dollar, and final answers should be presented to one decimal place. It is to be assumed that a year consists of 365 days.#### Steps for Calculation:1. **Accounts Receivable Turnover**: \[ \text{Accounts Receivable Turnover} = \frac{\text{Sales on Account}}{\text{Average Accounts Receivable}} \] - Average Accounts Receivable for a given year is calculated as the average of the accounts receivable at the end of the year and the accounts receivable at the end of the previous year.2. **Number of Days' Sales in Receivables**: \[ \text{Number of Days' Sales in Receivables} = \frac{365}{\text{Accounts Receivable Turnover}} \]**Data Input for Each Year:**| | 20Y3 | 20Y2 ||-------|-------------------------------|-------------------------------|| 1. | Accounts Receivable Turnover | Accounts Receivable Turnover || 2. | Number of Days' Sales in Receivables (days) | Number of Days' Sales in Receivables (days) |Calculations and explanations for these entries will be further developed based on the formulas provided.**Graphical Representation:**- There is no graphical representation included in the image.**Educational Objective:**This exercise aims to help students understand and master the practical

Average Accounts Receivable =(Opening Accounts Receivable + Closing Accounts Receivable) / 2…

The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y3 20Υ2 20Υ1 Accounts receivable, end of year $725,000 $650,000 $600,000 Sales on account 5,637,500 4,687,500 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Υ3 20Y2 1. Accounts receivable turnover 2. Number of days' sales in receivables days days

The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y3 20Υ2 20Υ1 Accounts receivable, end of year $725,000 $650,000 $600,000 Sales on account 5,637,500 4,687,500 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Υ3 20Y2 1. Accounts receivable turnover 2. Number of days' sales in receivables days days

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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kk. Subject :- Accounting
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