Question - For the Year 2 and Year 1, Montague Inc. reported the following:
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Year 2
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Year 1
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|
Sales
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$3,621,530
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$3,484,290
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|
Accounts receivable
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445,300
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438,000
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Assume that the accounts receivable were $372,300 at the beginning of Year 1.
Lassiter Company reported the following:
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Year 2
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Year 1
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Sales
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$1,938,150
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$1,962,240
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Accounts receivable
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211,700
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219,000
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Assume that accounts receivable were $248,200 at the beginning of Year 1.
a. Compute the average accounts receivable turnover ratio for Montague Inc. and Lassiter Company for Year 2 and Year 1. Round to one decimal place.
b. Does Lassiter Company or Montague Inc. have the higher average accounts receivable turnover ratio?