Answer:
The receivables turnover ratio of Rye is 20.21
Explanation:
The receivables turnover ratio of Rye is computed as:
Receivables turnover ratio = Net Sales / Average Accounts Receivable
where
Net Sales = Sales - Sales returns and allowances
Net Sales = $1,240,000 - $108,000
Net Sales = $1,132,000
Average Accounts Receivable = Beginning Net Accounts Receivable + Ending Net Accounts Receivable / 2
Average Accounts Receivable = $49,000 + $63,000 / 2
Average Accounts Receivable = $112,000 / 2
Average Accounts Receivable = $56,000
Putting the values above:
Receivables turnover ratio = $1,132,000 / $56,000
Receivables turnover ratio = 20.21
