Textbook:Accounting Principles 9th edition, ISBN 978-0470-31754-9, Weygandt
Read Chapter 9. Pages 414 and 415 show the formulas needed for this assignment.
Bledel Company had accounts receivable of $100,000 on January 1, 2010. The only transactions that affected accounts receivable during 2010 were net credit sales of $1,000,000; cash collections of $900,000 and accounts written off of $30,000.
a. Compute the ending balance of accounts receivable on 12/31/10.
b. Compute the accounts receivable turnover ratio for 2010.
c. Computer the average collection period in days.
a. Ending balance = Opening balance + Sales (sales on credit would increase the balance) - Collections (collection will reduce the receivables) - write off (this ...
The solution explains how to calculate ending balance of accounts receivable, accounts receivable turnover ratio and the average collection period in days.