Based on the Following Data and Using a 365-Day Year

question 93

Essay

Based on the following data and using a 365-day year, compute (a) the accounts receivable turnover and (b) the number of days' sales in receivables for year 2 to 2 decimal places. The industry average turnover is 20 times during the year, and the number of days' sales in receivables averages 25. (c) Comment on this situation.12/31/Year 1 accounts receivable
$ 100,000
12/31/Year 2 accounts receivable
70,000
For the year ended 12/31/Year 1, sales
1,050,000
For the year ended 12/31/Year 2, sales
1,200,000