Question

Selected data pertaining to lore co. for the calendar year 2005 is as follows: net cash sales $ 3,000 cost of goods sold 18,000 inventory at beginning of year 6,000 purchases 24,000 accounts receivable at the beginning of the year 20,000 accounts receivable at the end of the year 22,000 the accounts receivable turnover for 2005 was 5.0 times. what were lore's 2005 net credit sales?

Answer 1

Hi there

The accounts receivable turnover ratio equals net credit sales divided by average accounts receivable
So
5.0= Net credit sales/ (20,000 + 22,000/2)=
5 x 21,000= 105,000
Net Credit Sales= 105,000


Hope it helps