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lina2011 [118]
3 years ago
9

A company reports the following: Sales $4,560,000 Average accounts receivable (net) 380,000 Determine (a) the accounts receivabl

e turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover b. Number of days' sales in receivables days
Business
1 answer:
puteri [66]3 years ago
4 0

Answer:

a. 12 times

b. 30.42 days

Explanation:

Data provided in the question

Sales = $4,560,000

Average account receivable = $380,000

So, The computation is shown below:

a. Account receivable turnover ratio is

= Sales ÷ average account receivable (net)

= $4,560,000 ÷ $380,000

= 12 times

b. Now the number of days sales in receivable is

= Total number of days in a year ÷ account receivable turnover ratio

= 365 days ÷ 12 times

= 30.42 days

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