Calculation of Account Receivable on the basis of Net sales

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  accounts receivable turnover = total credit sales / accounts receivable Thus account receivable = Total sales / account receivable turnover From the calculation, we find that the account receivable ratio is actually increasing. 2.

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  In this example the allowance calculated with percentage of Account receivable method is increased by the debit balance of $18000 in the Allowance account ( 2) 1.5 percent of 2011 net sales are uncollectible. 1.5 % of Net sales (2135000 X 1.5