For two recent years, Robinhood Company reported the following:

Line Item Description	20Y9	20Y8
Sales	$7,524,000	$6,380,000
Accounts receivable:
Beginning of year	580,000	520,000
End of year	560,000	580,000
a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round your answers to one decimal place.

20Y8: fill in the blank 1 of 2

20Y9: fill in the blank 2 of 2

b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Assume 365 days in a year. Round intermediate calculations and final answers to one decimal place.

20Y8: fill in the blank 1 of 2
days
20Y9: fill in the blank 2 of 2
days

### Part (a): Accounts Receivable Turnover

The formula for the accounts receivable turnover is:

\[
\text{Accounts Receivable Turnover} = \frac{\text{Sales}}{\text{Average Accounts Receivable}}
\]

Where:
- **Average Accounts Receivable** = $\frac{\text{Beginning Accounts Receivable} + \text{Ending Accounts Receivable}}{2}$

**For 20Y9:**
- Sales for 20Y9 = $7,524,000
- Average Accounts Receivable for 20Y9 = $\frac{580,000 + 560,000}{2} = 570,000$

\[
\text{Accounts Receivable Turnover for 20Y9} = \frac{7,524,000}{570,000} \approx 13.2
\]

**For 20Y8:**
- Sales for 20Y8 = $6,380,000
- Average Accounts Receivable for 20Y8 = $\frac{520,000 + 580,000}{2} = 550,000$

\[
\text{Accounts Receivable Turnover for 20Y8} = \frac{6,380,000}{550,000} \approx 11.6
\]

### Part (b): Days' Sales in Receivables

The formula for days' sales in receivables is:

\[
\text{Days' Sales in Receivables} = \frac{365}{\text{Accounts Receivable Turnover}}
\]

**For 20Y9:**
\[
\text{Days' Sales in Receivables for 20Y9} = \frac{365}{13.2} \approx 27.7 \text{ days}
\]

**For 20Y8:**
\[
\text{Days' Sales in Receivables for 20Y8} = \frac{365}{11.6} \approx 31.5 \text{ days}
\]

### Summary:
- **Accounts Receivable Turnover for 20Y8:** 11.6
- **Accounts Receivable Turnover for 20Y9:** 13.2
- **Days' Sales in Receivables for 20Y8:** 31.5 days
- **Days' Sales in Receivables for 20Y9:** 27.7 days

Would you like more details or have any questions?

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Here are 5 related questions:
1. How does an increase in accounts receivable turnover impact cash flow?
2. What is the significance of days' sales in receivables for a company's liquidity?
3. How do changes in sales affect accounts receivable turnover?
4. How would increasing credit terms affect the accounts receivable turnover ratio?
5. What strategies can a company employ to reduce its days' sales in receivables?

**Tip:** A higher accounts receivable turnover ratio often indicates that a company is collecting payments more efficiently.

For two recent years, Robinhood Company reported the following:

Line Item Description  20Y9  20Y8
Sales $7,524,000 $6,380,000
Accounts receivable:
Beginning of year 580,000 520,000
End of year 560,000 580,000
a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round your answers to one decimal place.

20Y8: fill in the blank 1 of 2

20Y9: fill in the blank 2 of 2

b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Assume 365 days in a year. Round intermediate calculations and final answers to one decimal place.

20Y8: fill in the blank 1 of 2
days
20Y9: fill in the blank 2 of 2
days

Learn how to calculate accounts receivable turnover and days' sales in receivables for Robinhood Company using sales and accounts receivable data for 20Y9 and 20Y8. This solution involves important accounting ratios with step-by-step calculations. Suitable for college-level accounting students.

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