Analyze the accounts receivable and allowance for doubtful

Question

CALCULATIONS/FORMULAS must be provided per the plausible explanation for the results

The following calculations have been made for ABC Company:

 

                                                                                                               Growth rate

                                                                                                             2013 to 2014

            Net sales                                                                                         10.5%

            Total accounts receivable                                                                    21.3%

            Allowance for doubtful accounts                                                            2.6%

 

                                                                                                                                                                                                                                                         2014                   2013

            Allowance for doubtful accounts as a

            percentage of total accounts receivable                 3.8%               5.4%

 

Analyze the accounts receivable and allowance for doubtful accounts changes and provide plausible explanations for the results.