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

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Definitions:

Digital Information Systems

Platforms and tools that use digital technology to collect, store, manage, and disseminate information, enhancing business operations and decision-making.

Operating Expenses

Expenditures that a business incurs through its normal business operations.

Human Resource Strategy

A plan of action designed to achieve a company's objectives by effectively managing and deploying its human resources.

Micro-Business

A small business typically characterized by having fewer than 10 employees, often operating with a low capital investment and in a localized market.