Respuesta :
Answer:
The Accounts Receivable turnover ratio is 7.6.
Step-by-step explanation:
Given:
With a beginning Accounts Receivable balance of $70,000, an ending balance of $140,000, and net credit sales of $800,000.
Now, to find the Accounts Receivable turnover ratio.
Accounts Receivable balance (beginning) = $70,000.
Accounts Receivable balance (ending) = $140,000.
Net credit sales = $800,000.
So, we calculate the average net sales by putting formula:
Average net sales = Accounts Receivable balance (beginning) + Accounts Receivable balance (ending) / 2.
[tex]Average\ net\ sales = \frac{70,000+140,000}{2}[/tex]
[tex]Average\ net\ sales=\frac{210,000}{2}[/tex]
[tex]Average\ net\ sales=\$105,000.[/tex]
Now, putting formula to get the Accounts Receivable turnover ratio:
Accounts Accounts Receivable turnover = Net credit sales / Average net sales
= [tex]\frac{800000}{105000}[/tex]
= [tex]\frac{160}{21}[/tex]
= [tex]7.619.[/tex]
So, Accounts Receivable turnover rounded to the nearest tenth = 7.6.
Therefore, the Accounts Receivable turnover ratio is 7.6.
