Renfro Company Had Accounts Receivable of $100,000 on January 1

question 151

Essay

Renfro Company had accounts receivable of $100,000 on January 1, 2018. The only transactions that affected accounts receivable during 2018 were net credit sales of $1,200,000, cash collections of $1,000,000, and accounts written off of $30,000.
Instructions
(a) Compute the ending balance of accounts receivable.
(b) Compute the accounts receivable turnover for 2018.
(c) Compute the average collection period in days.

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Definitions:

Multiplier

In economics, it refers to the factor by which a change in investment, spending, or income will ultimately affect the total economic output.

Federal Budget Deficits

The shortfall where the government's expenditures exceed its revenue within a fiscal year.

Expenditures

The act of spending funds or resources, typically referring to the outflow of money by a government, organization, or individual for various purposes.

Tax Cuts

Reductions in the amount of taxes imposed by a government on individuals or entities.