PE 9-6A Accounts receivable turnover and number of days’ sales in receivables
Financial statement data for years ending December 31 for Blum Company are shown below.
|
2012 |
2011 |
|
|
Net sales |
$2,430,000 |
$1,920,000 |
|
Accounts receivable: |
||
|
Beginning of year |
180,000 |
120,000 |
|
End of year |
225,000 |
180,000 |
a. Determine the accounts receivable turnover for 2012 and 2011.
b. Determine the number of days’ sales in receivables for 2012 and 2011. Round to one decimal place.
c. Does the change in accounts receivable turnover and the number of days’ sales in receivables from 2011 to 2012 indicate a favorable or an unfavorable trend?