Answered

Welcome to Westonci.ca, your ultimate destination for finding answers to a wide range of questions from experts. Get quick and reliable solutions to your questions from a community of experienced professionals on our platform. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

Presented below is information for Kingbird Company.
1. Beginning-of-the-year Accounts Receivable balance was $16,600.
2. Net sales (all on account) for the year were $102,400. Kingbird does not offer cash discounts.
3. Collections on accounts receivable during the year were $90,000.
a. Prepare (summary) journal entries to record the items noted above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2. 3. SHOW LIST OF ACCOUNTS
b. Compute Kingbird's accounts receivable turnover and days to collect receivables for the year. The company does not believe it will have any bad debts. (Round answers to 2 decimal places, e.g. 4.57.) Accounts receivable turnover times Days to collect accounts receivable days Use the results to analyze Kingbird's liquidity. The turnover ratio last year was 8.1. This is a trend in liquidity.

Sagot :

anthougo

Answer:

Kingbird Company

a) Journal Entries:

1. No journal required

2. Debit Accounts Receivable $102,400

Credit Sales Revenue $102,400

To record sales on account.

3. Debit Cash $90,000

Credit Accounts Receivable $90,000

To record the collections on account.

b) Accounts receivable turnover and days:

Accounts receivable turnover = Sales/Average Receivable

= $102,400/22,800

= 4.49

Accounts receivable days = 365/4.49 = 81.29 days

c) The accounts receivable turnover ratio for the current year is 4.49.  This is better than last year's 8.1.  The current year's ratio shows that liquidity had been improved.

Explanation:

a) Data and Calculations:

Accounts Receivable:

Beginning balance $16,600

Net sales                 102,400

Cash collections     (90,000)

Ending balance     $29,000

Average receivable = ($16,600 + $29,000)/2 = $22,800

We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.