Playworld,Inc.sells playground equipment to schools and municipalities.Invoices are mailed at the end of each month for all goods shipped during that month;credit terms are net 30 days.Sales and accounts receivable data for 2015,2014,and 2015 were as follows:

Required:
a.Calculate the growth rates in sales and receivables during 2014 and 2015.
b.Do your calculations indicate any potential problems with Playworld's receivables? If so,suggest a possible explanation for your findings.

Question

Playworld,Inc.sells playground equipment to schools and municipalities.Invoices are mailed at the end of each month for all goods shipped during that month;credit terms are net 30 days.Sales and accounts receivable data for 2015,2014,and 2015 were as follows:
 
Required:
a.Calculate the growth rates in sales and receivables during 2014 and 2015.
b.Do your calculations indicate any potential problems with Playworld's receivables? If so,suggest a possible explanation for your findings.

Quizplus · Accepted Answer

The Answer of Playworld,Inc.sells playground equipment to schools and municipalities.Invoices are mailed at the end of each month for all goods shipped during that month;credit terms are net 30 days.Sales and accounts receivable data for 2015,2014,and 2015 were as follows:
 
Required:
a.Calculate the growth rates in sales and receivables during 2014 and 2015.
b.Do your calculations indicate any potential problems with Playworld's receivables? If so,suggest a possible explanation for your findings.