Question

Beverage International reports net credit sales for the year of $252,000. The company's accounts receivable balance at the beginning of the year equaled $48,000 and the balance at the end of the year equaled $58,000. What is Beverage International's receivables turnover ratio

Answer 1

Answer:

4.8

Explanation:

The formular to find the receivable turn over ratio is

= net credit sales/average.

account receivable

The values given are:

Net credit sales for the year=$252,000

Company account receivable balance at the beginning of the year= $48,000

Company account receivable balance at the end of the year= $58,000

To find the average account receivable we will sum both balance and divide by 2

= 48,000+58,000/2

= 106,000/2

= $53,000

Average account receivable is $53,000

Therefore, receivable turn over ratio is

= $252,000/$53,000

= 4.8

Thus, Beverage international's receivables turn over ratio is 4.8