A recent annual report for C Co. contained the following data: $$\begin{array} { | l | r | r | }
\hline & \underline { \mathbf { 2 0 1 2 } } & \underline { \mathbf { 2 0 1 1 } } \
\hline \text { Trade receivables } & \$ 1,798 & \$ 1,666 \
\hline \text { Less: Allowance for Doubtful Accounts } & 12 & 10 \
\hline \text { Net trade receivables } & 1,786 & 1,656 \
\hline \text { Net sales (assume all are on credit) } & \$ 19,805 & \
\hline
\end{array}$$
1. Calculate the receivables turnover ratio and average collection period for the year:
a. Receivables turnover
b. Average collection period
2. What do these results indicate?

Question

A recent annual report for C Co. contained the following data: $$\begin{array} { | l | r | r | } 
\hline & \underline { \mathbf { 2 0 1 2 } } & \underline { \mathbf { 2 0 1 1 } } \
\hline \text { Trade receivables } & \$ 1,798 & \$ 1,666 \
\hline \text { Less: Allowance for Doubtful Accounts } & 12 & 10 \
\hline \text { Net trade receivables } & 1,786 & 1,656 \
\hline \text { Net sales (assume all are on credit) } & \$ 19,805 & \
\hline
\end{array}$$ 
1. Calculate the receivables turnover ratio and average collection period for the year: 
a. Receivables turnover 
b. Average collection period 
2. What do these results indicate?

Quizplus · Accepted Answer

The Answer of A recent annual report for C Co. contained the following data: $$\begin{array} { | l | r | r | } 
\hline & \underline { \mathbf { 2 0 1 2 } } & \underline { \mathbf { 2 0 1 1 } } \
\hline \text { Trade receivables } & \$ 1,798 & \$ 1,666 \
\hline \text { Less: Allowance for Doubtful Accounts } & 12 & 10 \
\hline \text { Net trade receivables } & 1,786 & 1,656 \
\hline \text { Net sales (assume all are on credit) } & \$ 19,805 & \
\hline
\end{array}$$ 
1. Calculate the receivables turnover ratio and average collection period for the year: 
a. Receivables turnover 
b. Average collection period 
2. What do these results indicate?

A Recent Annual Report for C Co 1 Calculate the Receivables Turnover Ratio and Average Collection Period