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The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y3 20Y2 20Y1 Accounts receivable, end of year $710,000 $630,000 $565,000 Sales on account 5,691,000 4,628,500 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Assume a 365-day year. Do not round intermediate calculations. Round your answers to one decimal place. 20Y3 20Y2 1. Accounts receivable turnover fill in the blank 2 fill in the blank 3 2. Number of days' sales in receivables fill in the blank 4 days fill in the blank 5 days The collection of accounts receivable has . This can be seen in both the in accounts receivable turnover and the in the collection period.

Sagot :

anthougo

Answer:

Sigmon Inc.

1. Accounts receivable turnover = Sales/Average accounts receivable

20Y3 = 8.49x

20Y2 = 7.75x

2. Number of days sales in receivables = 365/Accounts receivable turnover

20Y3 = 43 days

20y2 = 47.1 days

3. The collection of accounts receivable has improved from 47.1 days to 43 days. This can be seen in both the in accounts receivable turnover and the in the collection period.

Explanation:

a) Data and Calculations:

Terms of all sales are 2/10, n/45

                                                             20Y3          20Y2           20Y1

Accounts receivable, end of year $710,000   $630,000   $565,000

Sales on account                          5,691,000  4,628,500  

Average accounts receivable        670,000     597,500

1. Accounts receivable turnover = Sales/Average accounts receivable

20Y3 = 8.49x ($5,691,000/$670,000)

20Y2 = 7.75x ($4,628,500/$597,500)

2. Number of days sales in receivables = 365/Accounts receivable turnover

20Y3 = 43 days (365/8.49)

20y2 = 47.1 days (365/7.75)

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