Answer:
The company's average days to collect receivables is 18.25 days.
Explanation:
For computing the company's average days to collect receivables, first we have to calculate the account receivable turnover ratio. The formula is shown below
Account Receivable Turnover ratio = Net credit Sales ÷ Average accounts receivable
where,
Net credit sales is given
And, the average accounts receivable = (Year 1 + Year 2) ÷ 2
= ($15,000 + $12,000) ÷ 2
= $13,500
So, Account Receivable Turnover ratio = $270,000 ÷ $13,500 = 20
Now, average days to collect receivables = Number of days in a year ÷ Account Receivable Turnover ratio
= 365 ÷ 20
= 18.25 days
Hence, the company's average days to collect receivables is 18.25 days.
It is referred to as DECISION MAKING FOR SOCIAL RESPONSIBILITY. Social responsibility has to do with people and organizations behaving and conducting business ethically and with sensitivity toward cultural, economic, social and environmental issues.
Answer:
The amount of net revenue Eagle should report for Year 5 is $ 80,000.
Explanation:
Under Cash basis of accounting revenue and expenses are recorded when payment against them is made or received. Expenses and revenues incurred are not relevant.
The amount of net revenue will comprises of revenue received in cash during the reporting period. Detail Calculations are given below.
Cash Sales $ 80,000
Returns and allowances ($ 4,000)
Discounts ($ 6,000)
Opening Receivable $ 40,000
Closing Receivable ($ 30,000)
Net revenue $ 80,000
