Question

Presented below is information for Sheffield Company. 1. Beginning-of-the-year Accounts Receivable balance was $24,900. 2. Net sales (all on account) for the year were $105,300. Sheffield does not offer cash discounts. 3. Collections on accounts receivable during the year were $84,300. New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct. Prepare (summary) journal entries to record the items noted above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. enter an account title No Entry enter a debit amount 0 enter a credit amount enter an account title No Entry enter a debit amount enter a credit amount 0 2. enter an account title Accounts Receivable enter a debit amount 105300 enter a credit amount enter an account title Sales Revenue enter a debit amount enter a credit amount 105300 3. enter an account title Cash enter a debit amount 84300 enter a credit amount enter an account title Accounts Receivable enter a debit amount enter a credit amount 84300 eTextbook and Media List of Accounts Incorrect answer iconYour answer is incorrect. Compute Sheffield’s accounts receivable turnover and days to collect receivables for the year. The company does not believe it will have any bad debts. (Round answers to 2 decimal places, e.g. 4.57.) Accounts receivable turnover enter Accounts receivable turnover in times 35400 times Days to collect accounts receivable enter Days to collect accounts receivable 2.97 days eTextbook and Media List of Accounts New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect. Use the turnover ratio computed in (b) to analyze Sheffield's liquidity. The turnover ratio last year was 5.3. This is a select an option trend in liquidity.

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
General Journal:
Event	Account	Debit	Credit
1	Accounts Receivable	$               105,300
	Sales Revenue		$   105,300
	(To record sale)
2	Cash	$                 84,300
	Accounts Receivable		$      84,300
	(To record cash received)
	Accounts Receivable Turnover:
	Net Credit Sale	a	$   105,300
	Average Accounts Receivable:	b	$      35,400
	($2,4900+$4,5900)/2
	Accounts Receivable Turnover	a/b	2.97
	Working:
	Beginning	$                 24,900
	Add: Sale	$               105,300
	Less: Collection	$               (84,300)
	Ending	$                 45,900
	Days to collect Accounts receivable	365 days/2.97	123	Days
	Turnover ratio has reduced from 5.3 to 2.97
	meaning its taking more time to realize cash and hence negative impact on liquidity