Question

If Newton Manufacturers has an accounts receivable turnover of 4.8 times and net sales of $7,812,379, what would its receivables be?

Answer 1

$1,627,579

Step-by-step explanation:

The formula and the computation of the account receivable turnover ratio is presented below:

Account receivable turnover ratio = Net credit sales ÷ Average accounts receivable

4.8 times = $7,812,379 ÷ Average accounts receivable

So, the average accounts receivable would be

= $7,812,379 ÷ 4.8 times

= $1,627,579