The following information was taken from the 2010 financial statements of Honey Factory Ltd: (in …

The following information was taken from the 2010 financial statements of Honey Factory Ltd: (in …

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The following information was taken from the 2010financial statements of Honey Factory Ltd:(inmillions)                  2010 2009 2008Accounts receivable $ 146.6 $ 104.3 $ 126.0Allowance for doubtful debts 6.3 5.7 8.2Sales                               1 113.0 899.3 756.9Total current assets     367.2 285.8258.7Required: Answer each of the following questions.(a) Calculate the receivables turnover and average collectionperiod for 2010 and 2009 for the entity, assumingall sales are on credit.(b) Calculate the credit risk ratio for the entity for 2010 and2009.(c) Comment on the entity’s credit and collection policies.

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