Question

Megan LLC account receivable = 240,000 on Jan 1, 2019 There was a net credit of...

Megan LLC account receivable = 240,000 on Jan 1, 2019

There was a net credit of =1,700,000 during 2019.

cash collection of =1,698,000

accounts written off = 30,000

A) Compute account receivable turn over for this year?

B)Average collections period in days? 365 days for calulations.

Please show work so I can understand how to find solutions.

Homework Answers

Answer #1

Answer :

Account receivable on Dec 31, 2019

= Account receivable on Jan 1, 2019 + Net credit - Cash collection - Accounts written off

= 240,000 + 1,700,000 - 1,698,000 - 30,000

= 212,000

Average Account receivable = (240,000 + 212,000) / 2 = 226,000

a. Account receivable turnover for this year :

Account receivable turnover ratio

= Net credit sales / Average Account receivable

= 1,700,000 / 226,000

= 7.52 times

b. Average collections period in days ;

Average collections period

= 365 days / Account receivable turnover ratio

= 365 days / 7.52 times

= 48.54 days

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Blue Spruce Corp. had accounts receivable of $240,000 on January 1, 2019. The only transactions that...
Blue Spruce Corp. had accounts receivable of $240,000 on January 1, 2019. The only transactions that affected accounts receivable during 2019 were net credit sales of $2,650,000, cash collections of $2,550,000, and accounts written off of $50,000. Compute the ending balance of accounts receivable. Ending balance of accounts receivable $ LINK TO TEXT Compute the accounts receivable turnover for 2019. (Round answer to 0 decimal places, e.g. 25.) Accounts receivable turnover LINK TO TEXT Compute the average collection period in...
On Jan 1 2020 ABC inc had the following accounts on its books Acc receivable $120,000...
On Jan 1 2020 ABC inc had the following accounts on its books Acc receivable $120,000 (debit) Allowance for uncollectible accounts $4,000 (credit) During this year credit sales were $600,000 and collection on account were $580,000 A. Prepare general journal entries for the following transactions that occurred during the year: 1. Wrote off A companies account $3400 2. Wrote off B Inc account $1200 3. B inc which is in bankruptcy paid $400 in final settlement of the account written...
A company reported the following items for 2013: Accounts receivable balance, Jan 1, 2013                           &nbs
A company reported the following items for 2013: Accounts receivable balance, Jan 1, 2013                                          $80,000 Allowance for uncollectible accounts balance, Jan. 1, 2013 12,000 Total credit sales during 2013    400,000 Total cash collections on accounts receivable during 2013    360,000 Account written off during 2013                                                          15,000 The account balances shown above are normal balances. Experience indicates that 4% of the gross accounts receivable balance at the end of each year ultimately will be uncollectible OR 1.5% of credit sales....
In 2020, Nash Company has net credit sales of $1,030,000 for the year. It had a...
In 2020, Nash Company has net credit sales of $1,030,000 for the year. It had a beginning accounts receivable (net) balance of $100,000 and an ending accounts receivable (net) balance of $106,000. Compute Nash Company’s accounts receivable turnover. (Round answer to 1 decimal place, e.g. 2.5.) Accounts receivable turnover times       Compute Nash Company’s average collection period in days. (Round answer to 1 decimal place, e.g. 2.5. Use 365 days for calculations.) Average collection period days
At the beginning of the current period, Granger Enterprises Ltd. had balances in Accounts Receivable of...
At the beginning of the current period, Granger Enterprises Ltd. had balances in Accounts Receivable of $2,104,000 and in Allowance for Doubtful Accounts of $140,000 (credit). During the period, Granger had credit sales of $4,332,000 with cost of goods sold of $3,120,000 and collections of $5,231,000. It wrote off $188,000 of accounts receivable. However, a $30,000 account written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $79,000 at the end...
Blunt Company makes credit sales of $25,000 during the month of February 2019. During 2019, collections...
Blunt Company makes credit sales of $25,000 during the month of February 2019. During 2019, collections are received on February sales of $24,500, accounts representing $500 of these sales are written off as uncollectible, and a $100 account previously written off is collected. 1b. Assume that the bad debts are recorded as they actually occur. Prepare the journal entry on February 28 to record the credit sales for February. Next, record the collections on account, the amount that was written...
At December 31, 2021, Splish Brothers Inc. reported this information on its balance sheet. Accounts receivable...
At December 31, 2021, Splish Brothers Inc. reported this information on its balance sheet. Accounts receivable $581,000 Less: Allowance for doubtful accounts 37,000 During 2022, the company had the following transactions related to receivables. 1. Sales on account $2,355,000 2. Sales returns and allowances 49,000 3. Collections of accounts receivable 2,050,000 4. Write-offs of accounts receivable deemed uncollectible 38,000 5. Recovery of bad debts previously written off as uncollectible 16,000 Compute the accounts receivable turnover and average collection period, assuming...
At the beginning of the current period, Skysong, Inc. had balances in Accounts Receivable of $197,000...
At the beginning of the current period, Skysong, Inc. had balances in Accounts Receivable of $197,000 and in Allowance for Doubtful Accounts of $9,040 (credit). During the period, it had credit sales of $862,700 and collections of $838,670. It wrote off as uncollectible accounts receivable of $7,477. However, a $3,049 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $26,310 at the end of the period. (Omit cost...
ABC Ltd has accounts receivable of $99 600 at 30 April, 2019. An analysis of the...
ABC Ltd has accounts receivable of $99 600 at 30 April, 2019. An analysis of the accounts shows these amounts as follows: Month of sale Balance of Accounts Receivable April, 2019 $50 000 March, 2019 43 000 February, 2019 1 200 January, 2019 5 100 December and November, 2018 300 99 600 Credit terms are 2/7, n/30. At 30 April, 2019, there is a $2000 credit balance in Allowance for Doubtful Debts before adjustment. The entity uses the ageing of...
ABC Ltd has accounts receivable of $99 600 at 30 April, 2019. An analysis of the...
ABC Ltd has accounts receivable of $99 600 at 30 April, 2019. An analysis of the accounts shows these amounts as follows: Month of sale Balance of Accounts Receivable April, 2019 $50 000 March, 2019 43 000 February, 2019 1 200 January, 2019 5 100 December and November, 2018 300 99 600 Credit terms are 2/7, n/30. At 30 April, 2019, there is a $2000 credit balance in Allowance for Doubtful Debts before adjustment. The entity uses the ageing of...