Financial Statement Data for the Years Ended December 31 for Parker

question 66

Essay

Financial statement data for the years ended December 31 for Parker Corporation are as follows:​Current Year Prior YearSales $2,595,600 $2,409,500Accounts receivable:Beginning of year 390,000 400,000End of year 434,000 390,000​
(a) Determine the accounts receivable turnover for each year.Round to one decimal place.
(b) Determine the days' sales in receivables for each year.Round to whole days.
(c) Does the change in accounts receivable turnover and days' sales in receivables fromthe first year to the second year indicate a favorable or unfavorable trend?

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Definitions:

Overtime Compensation

Additional pay provided to employees who work beyond the standard hours defined by their contract or by law.

Noncompetition Clause

A provision within a contract that restricts one party from engaging in activities that compete with the other party, typically after the termination of the agreement.

Enforceable

Describes a contract or legal obligation that is valid and can be upheld and compelled by law.

Criteria

Standards, rules, or tests by which something can be judged or decisions are made.