Answer:
The Accounts Receivable turnover ratio is <u>7.6</u>.
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.
![Average\ net\ sales = \frac{70,000+140,000}{2}](https://tex.z-dn.net/?f=Average%5C%20net%5C%20sales%20%3D%20%5Cfrac%7B70%2C000%2B140%2C000%7D%7B2%7D)
![Average\ net\ sales=\frac{210,000}{2}](https://tex.z-dn.net/?f=Average%5C%20net%5C%20sales%3D%5Cfrac%7B210%2C000%7D%7B2%7D)
![Average\ net\ sales=\$105,000.](https://tex.z-dn.net/?f=Average%5C%20net%5C%20sales%3D%5C%24105%2C000.)
Now, putting formula to get the Accounts Receivable turnover ratio:
Accounts Accounts Receivable turnover = Net credit sales / Average net sales
= ![\frac{800000}{105000}](https://tex.z-dn.net/?f=%5Cfrac%7B800000%7D%7B105000%7D)
= ![\frac{160}{21}](https://tex.z-dn.net/?f=%5Cfrac%7B160%7D%7B21%7D)
= ![7.619.](https://tex.z-dn.net/?f=7.619.)
<em>So, Accounts Receivable turnover rounded to the nearest tenth = 7.6.</em>
Therefore, the Accounts Receivable turnover ratio is 7.6.