Question

Q 8.15: The financial statements of the Tyler Company report net sales of $300,000 and accounts receivable of $50,000 and $10,000 at the beginning of the year and end of year, respectively. What is the accounts receivable turnover for the Tyler Company

Answer 1

Answer:

10 times

Explanation:

The financial statement of Tyler company reports a net sales of $300,000

The account receivables at the beginning of the year is $50,000

The account receivables at the end of the year is $10,000

Therefore, the accounts receivable turnover for Tyler company can be calculated as follows

= net sales/average net account receivables

= $300,000/($50,000+$10,000/2)

= $300,000/($60,000/2)

= $300,000/$30,000

= 10 times

Hence the accounts receivable turnover for Tyler company is 10 times