Financial Accounting

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Calculate accounts receivable turnover ratio.

Calculate accounts receivable turnover ratio. Selected information from Mystic Corporation’s balance sheet at December 31, 2010 and income statement for the year ended December 31, 2010 is as follows:
Cash $35,000
Accounts receivable, net 73,000
Equipment, net 225,000
Interest payable 1,350
Net income 65,000
Inventory office supplies 350,000
Office supplies 5,000
Sales revenue 775,000
Interest expense 1,500
Insurance expense 5,000
Requirements
1. Calculate the corporation’s accounts receivable turnover ratio. The net accounts receivable balance at December 31, 2009, was $87,000. Round to two decimal places. Explain what the accounts receivable turnover ratio measures.
2. On average, how many days does it take Mystic to collect its receivables?

Calculate the beginning bank balance. Consider the following about computer tech’s cash account for the month of April:
• On April 30, cash per computer tech’s records was $85,834.99.
• $16,008.13 in customer payments were received April 30 but not deposited until May 1.
• Checks totaling $22,461.87 were issued in April but had not cleared the bank as of the statement date (April 30).
• According to the bank statement, service charges for April were $54.50, and the collected a $4,900 note on April 19.
Requirements
Determine the April 30 cash balance that appears on computer tech’s bank statement. (Hint: compute the true cash balance first.)

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