Accounts Receivable Analysis The following data are taken from the financial sta
ID: 2409189 • Letter: A
Question
Accounts Receivable Analysis
The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45.
a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round answers to one decimal place. Assume a 365-day year.
b. The collection of accounts receivable has improved . This can be seen in both the increase in accounts receivable turnover and the decrease in the collection period.
20Y3 20Y2 20Y1 Accounts receivable, end of year $163,800 $172,000 $178,400 Sales on account 1,158,510 1,068,720Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars 20Y3 20Y2 Beginning Accounts receivable 172,000.00 178,400.00 Ending Accounts receivable 163,800.00 172,000.00 Average Accounts receivable 167,900.00 175,200.00 Sales on account 1,158,510.00 1,068,720.00 accounts receivable turnover = Sales on Account/Average Accounts receivable 6.90 6.10 number of days' sales in receivables. = 365/ Average Accounts receivable 52.90 59.84 b) The collection of accounts receivable has improved . This can be seen in both the increase in accounts receivable turnover and the decrease in the collection period. Thus the company performace has improved