Question

a company provided the following information on its financial statements for 2013: what is the company's accounts receivable turnover ratio for 2013? a. 2.06 b. 2.40 c. 2.88 d. 3.36

Answer 1

To calculate the accounts receivable turnover ratio, we need to divide the net credit sales by the average accounts receivable balance.

The net credit sales for 2013 are given as $24,000, and we can calculate the average accounts receivable balance by adding the accounts receivable balance at the beginning of the year to the accounts receivable balance at the end of the year, and dividing by 2.

Beginning accounts receivable = $3,000

Ending accounts receivable = $4,500

Average accounts receivable = ($3,000 + $4,500) / 2 = $3,750

Now we can calculate the accounts receivable turnover ratio as:

Accounts receivable turnover ratio = Net credit sales / Average accounts receivable

Accounts receivable turnover ratio = $24,000 / $3,750

Accounts receivable turnover ratio = 6.4

Therefore, the company's accounts receivable turnover ratio for 2013 is not one of the options provided. It is 6.4.