Chapter 18, Problem 18.11BE

(a)(1)

To determine

Accounts Receivable Turnover: The accounts receivable turnover refers to the ratio which determines the ability of a company that how efficient it is to use its assets and how efficiently it can issue the credit to the customers and collects the funds from them. The accounts receivable turnover is determined by dividing the credit sales from the average accounts receivable of that accounting period.

Average Collection Period: The average collection period refers to the average number of days which a company takes to collect the accounts receivable. The average collection period is determined by dividing the number of days in a year from the accounts receivable turnover.

To determine: (a) For each year (1) the accounts receivable turnover and (2) the average collection period and (b) conclusions that can be drawn from the data.

(b)

To determine

(b) conclusions that can be drawn from the data.