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Prepare summary journal entries | Accounting homework help

Paper Details

Presented below is information for Jones Company.
1. Beginning-of-the-year Accounts Receivable balance was $15,000.
2. Net sales (all on account) for the year were $100,000. Jones does not offer cash discounts.
3. Collections on accounts receivable during the year were $70,000.

Instructions
(a) Prepare summary journal entries to record the items noted above.
(b) Compute Jones?s accounts receivable turnover ratio and its days to collect accounts receivable for the year. The company does not believe it will have any bad debts.
(c) Use the turnover ratio computed in (b) to analyze Jones?s liquidity. The turnover ratio last year was 6.0.

Solution:

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