Question

Parker Hardware Store had net credit sales of $8,000,000 and cost of goods sold of $5,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The receivables turnover was

Answer 1

12.3076

Step-by-step explanation:

Receivables Turnover =
`(Net\: Credit\: Sales)/(Average\: Receivables)`

Here Net Credit sales = $8,000,000

Average Receivables =
`(Beginning\: Receivables + Closing\:Receivables)/(2)`

Opening Receivables = $600,000

Closing Receivables = $700,000

Average Receivables =
`(600,000 + 700,000)/(2) = 650,000`

Receivables Turnover =
`(8,000,000)/(650,000) = 12.3076`

12.3076