A company reports the following results in its financial statements:
$$\begin{array} { | l | c | c | c | }
\hline & \text { Year 3 } & \text { Year 2 } & \text { Year 1 } \
\hline \text { Net sales } & \$ 2,500,000 & \$ 2,050,000 & \$ 1,900,000 \
\hline \text { Accounts receivable, ending balance } & 175,000 & 167,000 & 165,000 \
\hline
\end{array}$$
Calculate this company's accounts receivable turnover for year 2 and year 3.Compare these two results and give a possible explanation for any significant change.

Question

A company reports the following results in its financial statements:
 $$\begin{array} { | l | c | c | c | } 
\hline & \text { Year 3 } & \text { Year 2 } & \text { Year 1 } \
\hline \text { Net sales } & \$ 2,500,000 & \$ 2,050,000 & \$ 1,900,000 \
\hline \text { Accounts receivable, ending balance } & 175,000 & 167,000 & 165,000 \
\hline
\end{array}$$ 
Calculate this company's accounts receivable turnover for year 2 and year 3.Compare these two results and give a possible explanation for any significant change.

Quizplus · Accepted Answer

The Answer of A company reports the following results in its financial statements:
 $$\begin{array} { | l | c | c | c | } 
\hline & \text { Year 3 } & \text { Year 2 } & \text { Year 1 } \
\hline \text { Net sales } & \$ 2,500,000 & \$ 2,050,000 & \$ 1,900,000 \
\hline \text { Accounts receivable, ending balance } & 175,000 & 167,000 & 165,000 \
\hline
\end{array}$$ 
Calculate this company's accounts receivable turnover for year 2 and year 3.Compare these two results and give a possible explanation for any significant change.

A Company Reports the Following Results in Its Financial Statements