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Accounts receivable management An evaluation of the books of Blair Supply which follows gives the end of year accounts receivable balance which is believed to consist of amounts originating in the

Accounts receivable management An evaluation of the books of Blair Supply, which follows, gives the end-of-year accounts receivable balance, which is believed to consist of amounts originating in the months indicated. The company had annual sales of $2.4 million. The firm extends 30-day credit terms.

Month of origin

Amounts receivable

July

$ 3,875

August

2,000

September

34,025

October

15,100

November

52,000

December Year-end accounts receivable

$300,000

a. Use the year-end total to evaluate the firm’s collection system.

b. If 70% of the firm’s sales occur between July and December, would this affect the validity of your conclusion in part a? Explain.

Apr 29 2020 View more View Less

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