The Following Data Are Taken from the Financial Statements of Dands

question 32

Essay

The following data are taken from the financial statements of Dands Company: $\begin{array}{l}\begin{array}{lll}&2017&2016\\\text { Monthly average accounts receivable } & \$ 565,000 & \$ 700,000 \\\text { Net sales on account } & \$ 6,200,000 & \$ 7,000,000\end{array}\\\text { Terms for all sales are } 2 / 10 \mathrm{n} / 30\end{array}$ Instructions
(a) Compute the accounts receivable turnover and the average collection period for both years.
(b) What conclusion can an analyst draw about the management of the accounts receivable?

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Definitions:

Enterprise Zones

Specific geographic areas designated for economic revitalization.

Economic Revitalization

The process of boosting the economic growth and development of an area or community, often through government initiatives or private investments.

Economic Stimulus

Governmental measures intended to encourage economic growth or counter economic downturns, often through fiscal policies like tax cuts or spending programs.

Angel Investor

A wealthy individual who provides capital to startups or entrepreneurs, often in exchange for ownership equity or convertible debt.