December 31 Accounts 2016 2015 Accounts Recelvable $50,500 $40,500 Allowance for

Question

December 31 Accounts 2016 2015 Accounts Recelvable $50,500 $40,500 Allowance for Doubtful Accounts 2,500 1,500 Merchandise Inventory 57,000 50,000 Office Supplies 25,000 20,000 Credit Sales 985,000 740,000 Sales Discounts 10,000 9,000 Interest Income 25,000 20,000 Cost of Goods Sold 460,000 385,000 1. What is the FY 2016 accounts recelvable turnover ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word times. CExample 1 125 would be entered 1.1 times) 2. What is the FY 2016 days outstanding for accounts recelvable ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word day.(Example 11 23wo dbe tered! 1 dan v

Explanation / Answer

2016 2015 Accounts receivable 50,500 40,500 less:Allowance for doubtful accounts -2,500 -2,500 net account receivable 48,000 38,000 sales 985,000 740,000 less sale discounts -10,000 -9,000 Net credit sale 975,000 731,000 average account receivable (48000+38000)/2 43000 Aaccount receivable turnover = net sales/average account receivable 975,000/43000 22.7 times days outstanding = 365/average account receivable 16.1 days

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