Final answer:
The accounts receivable turnover is calculated by dividing net credit sales by the average accounts receivable. Using the given data, the turnover is approximately 10.1, which corresponds to answer choice b.
option b is the correct
Step-by-step explanation:
To calculate the accounts receivable turnover, we need to use the formula:
Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable
We are given the following data:
- Sales on account during year: $507,154
- Accounts receivable, beginning of year: $45,454
- Accounts receivable, end of year: $54,550
First, determine the average accounts receivable:
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Average Accounts Receivable = ($45,454 + $54,550) / 2 = $50,002
Then, calculate the accounts receivable turnover:
Accounts Receivable Turnover = $507,154 / $50,002 ≈ 10.1
Therefore, the correct answer is b. 10.1.