[The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:
Accounts Debit Credit
Cash $ 24,900
Accounts Receivable 14,100
Allowance for Uncollectible Accounts $ 1,800
Supplies 3,000
Notes Receivable (6%, due in 2 years) 25,000
Land 77,500
Accounts Payable 8,800
Common Stock 101,000
Retained Earnings 32,900
Totals $ 144,500 $ 144,500
During January 2021, the following transactions occur:
January 2 Provide services to customers for cash, $40,100.
January 6 Provide services to customers on account, $77,400.
January 15 Write off accounts receivable as uncollectible, $1,400.
January 20 Pay cash for salaries, $31,900.
January 22 Receive cash on accounts receivable, $75,000.
January 25 Pay cash on accounts payable, $6,000.
January 30 Pay cash for utilities during January, $14,200.
Analyze how well 3D Family Fireworks manages its receivables:
a-1. Calculate the receivables turnover ratio for the month of January (Hint: For the numerator, use total services provided to customers on account). (Round your final answer to 1 decimal place.)
a-2. If the industry average of the receivables turnover ratios for the month of January is 4.4 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry