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A Company Reports the Following Results in Its Financial Statements

question 66

Essay

A company reports the following results in its financial statements:
Year 3 Year 2 Year 1
 Net Sales $2,500,000$2,100,000$1,900,000 Accounts receivable, Ending Balance 172,000167,000165,000\begin{array} { l l l l } \text { Net Sales } & \$ 2,500,000 & \$ 2,100,000 & \$ 1,900,000 \\\text { Accounts receivable, Ending Balance } & 172,000 & 167,000 & 165,000\end{array} Calculate the company accounts receivable turnover for Year 2 and Year 3. Compare these two results and give a possible explanation for any significant change.


Definitions:

Amortization

The gradual reduction of a debt over a period of time through regular payments covering interest and principal.

Dividends

Payments made by a corporation to its shareholder members from the company's earnings, distributed among shareholders.

Acquisition Date

The exact date on which the acquirer effectively gains control over the acquiree in a business combination.

Impairment Loss

A charge recorded when the carrying amount of an asset exceeds its recoverable amount.

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