Calculate the accounts receivable turnover


Assignment Task: At December 31, 2016, Teal Mountain Inc. Imports reported this information on its balance sheet.

Accounts receivable - $566,100

Less: Allowance for doubtful accounts - 35,860

During 2017, the company had the following transactions related to receivables.

1. Sales on account - $2,973,000

2. Sales returns and allowances - 36,176

3. Collections of accounts receivable - 2,542,300

4. Write-offs of accounts receivable deemed uncollectible - 40,190

5. Recovery of bad debts previously written off as uncollectible - 14,390

Required:

Question 1: Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.

Question 2: Entry the January 1, 2017, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts and determine the balance.

Question 3: Prepare the journal entry to record bad debt expense for 2017, assuming that aging the accounts receivable indicates that estimated bad debts are $115,754.

Question 4: Compute the accounts receivable turnover.

Question 5: Compute the average collection period.

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Accounting Basics: Calculate the accounts receivable turnover
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