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.
a. Use the year-end total to evaluate the firm’s collection system.
If 70% of the firm’s sales occur between July and December, would this
information affect the validity of your conclusion in part a? Explain.