Question
In: Accounting
The following data are taken from the financial statements of McKee Technology Inc. Terms of all...
The following data are taken from the financial statements of McKee Technology Inc. Terms of all sales are 2/10, n/55.
| 2016 | 2015 | 2014 | ||||
| Accounts receivable, end of year | $149,600 | $157,000 | $164,200 | |||
| Net sales on account | 827,820 | 786,940 | ||||
a. For 2015 and 2016, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round answers to one decimal place. Assume a 365-day year.
| 2016 | 2015 | |||
| 1. Accounts receivable turnover | ? |
? |
||
| 2. Number of days' sales in receivables | ? | days | ? | days |
Solutions
Expert Solution
- All working forms part of the answer
- Workings
|
Working |
2016 |
2015 |
|
|
A |
Beginning Accounts receivables |
$ 157,000.00 |
$ 164,200.00 |
|
B |
Ending Accounts receivables |
$ 149,600.00 |
$ 157,000.00 |
|
C = A+B |
Total |
$ 306,600.00 |
$ 321,200.00 |
|
D = C/2 |
Average Accounts receivables |
$ 153,300.00 |
$ 160,600.00 |
|
E |
Net sales on account |
$ 827,820.00 |
$ 786,940.00 |
|
F = E/D |
Accounts receivables Turnover |
5.4 |
4.9 |
|
Working |
2016 |
2015 |
|
|
A |
No. of Days |
365 |
365 |
|
B |
Accounts receivables Turnover |
5.4 |
4.9 |
|
C =A/B |
No. of days sales in receivables |
67.6 |
74.5 |
- Answers
|
2016 |
2015 |
|||
|
1. Accounts receivable turnover |
5.4 |
times |
4.9 |
times |
|
2. Number of days' sales in receivables |
67.6 |
days |
74.5 |
days |
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