The president of castle enterprises ltd Nichole Castle is considering the impact that certain

The president of castle enterprises ltd Nichole Castle is considering the impact that certain transactions have on its receivables turnover and average collections period ratios. Prior to the following transaction, castle’s receivables turnover was 6 times, and its average collection period was 61 days.
Transaction                receivable turnover 6X    Average Collection Period 61 days
1.        Recorded sales on account $100,000
2.        Collected $25,000 owing from customers
3.        Recorded bad debts expense for the year $7500 using the allowance method
4.        Recorded sales returns of $1500 and credited the customers accounts
5.        Wrote off a $2500 account from a customer as uncollectible.

A:  complete the table indicating whether each transaction will increase , Decrease, or no effect on the ratio

B: Nichole was reading through the financial statements for some publicly traded companies and noticed that they had recorded a loss on sale of receivables.  She would like you to explain why companies sell their receivables.