Question

Accounts receivable turnover and days’ sales in receivables For two recent years, Robinhood Company reported the following: 20Y9 20Y8 Sales $7,647,500 $6,264,000 Accounts receivable: Beginning of year 580,000 500,000 End of year 570,000 580,000

a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round answers to one decimal place. 20Y8: 20Y9:

b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Use 365 days and round all calculations to one decimal place. 20Y8: days 20Y9: days

c. Are the changes in the accounts receivable turnover and days’ sales in receivables from 20Y8 to 20Y9 favorable or unfavorable?

Answer 1

	2019	2018
sales	7647500	6264000
accounts receivable
beginning balance	580000	500000
ending balance	570000	580000
average accounts receivable	575000	540000
accounts receivable turnover	sales/average accounts receivable
	2019	2018
sales	7647500	6264000
average accounts receivable	575000	540000
accounts receivable turnover	13.3	11.6
days’ sales in receivables	365 days/accounts receivable turnover
	2019	2018
accounts receivable turnover	13.3	11.6
days’ sales in receivables	27.4	31.5

favourable changes