PROBLEM 5:5 POINTS Rivers Company had accounts receivable of $150,000 on January 1, 2020. The only transactions tha...

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PROBLEM 5:5 POINTS Rivers Company had accounts receivable of $150,000 on January 1, 2020. The only transactions that affected

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Answer 1

Answer #1

Answer of Part a:

Ending Accounts Receivable = Beginning Accounts Receivable + Net Credit Sales – Cash Collections – Accounts Written Off
Ending Accounts Receivable = $150,000 + $1,500,000 - $1,400,000 - $50,000
Ending Accounts Receivable = $200,000

Answer of Part b:

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) /2
Average Accounts Receivable = ($150,000 + $200,000) / 2
Average Accounts Receivable = $175,000

Accounts Receivable Turnover = Credit Sales / Average Accounts Receivable
Accounts Receivable Turnover = $1,500,000 / $175,000
Accounts Receivable Turnover = 8.57 times

Answer of part c:

Average Collection Period = 365 days / Accounts Receivable Turnover
Average Collection Period = 365 / 8.57
Average Collection Period = 42.59 days

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Answer 2

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PROBLEM 5:5 POINTS Rivers Company had accounts receivable of $150,000 on January 1, 2020. The only transactions tha...

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