Question

Question Content Area A company reports the following: Sales $1,243,190 Average accounts receivable (net) 94,900 Determine the (a) accounts receivable turnover, and (b) number of days' sales in receivables. When required, round your answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover fill in the blank 1 b. Number of days' sales in receivables fill in the blank 2 days

Answer 1

Accounts Receivable Turnover is 13.1 and the number of days in sales receivables is 27.8 days which is approx 28 days.

What is an Accounts Receivable Turnover?

Accounts Receivable Turnover is a turnover of several times per year a business collects its average accounts receivable.

Given

Sales=$1,243,190 (we assume whole sales on credit bases)

Average Accounts Receivable=$94,900

No of Days in a Year= 365(days)

Required to calculate:

Accounts Receivable Turnover=?

Number of days sales in receiables=?

Calculation of Accounts Receivable Turnover = Sales is divided by the average accounts receivable.

                                                            =$1,243,190/94900

                                                            =13.1 times

Calculation of Number of Days sales in Receivable= Number of Days in Year/ Accounts Receivable Turnover

                            =365/13.1 =28 Days(Approx)

Thus, the Accounts Receivable and a number of days sales in receivables are 13.1  times and 28 days respectively.

Learn more about Accounts Receivable Turnover here:

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