Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Kerwick Company had accounts receivable of $123,200 on January 1, 2017. The only

ID: 2510154 • Letter: K

Question

Kerwick Company had accounts receivable of $123,200 on January 1, 2017. The only transactions that affected accounts receivable during 2017 were net credit sales of $1,282,600, cash collections of $1,201,700, and accounts written off of $30,000 Your answer is incorrect. Try again. Compute the ending balance of accounts receivable. Ending balance of accounts receivable Your answer Your answer is incorrect. Try again. Compute the accounts receivable turnover for 2017. (Round answer to 2 decimal places, e.g. 2.50.) Accounts receivable turnover Your answer is incorrect. Try again. Compute the average collection period in days. (Round answer to 1 decimal place, e.g. 2.5. Use 365 days for calculations. Average collection period 65 days for calculations)

Explanation / Answer

1. Beginning Accounts Receivable = 123,200

Net Credit Sales = 1,282,600

cash Collections = 1,201,700

Accounts Written off = 30,000

1 Ending Balance of Accounts receivable = 174100

Beginning Account Receivable = 123,200

add: Net Credit sales 1,282,600

1,405,800

less: Cash collections 1,201,700

204,100

Less; Accounts Written off 30,000

Ending Accounts Receivable 174,100

2. Acccounts receivable turnover for 2017

Formula = Net Credit Sales/ Average Accounts Receivable

= 1,282,600 /(123,200 +174,100)/2 =1,282,600 / 148,650 = 8.62832 = 8.6

3. Average Collection Period = Number of days in a year /Accounts receivable turnover

= 365 /8.6 = 42.4418 = 42.4 days