Question

Accounts receivable turnover and days’ sales in receivables For two recent years, Robinhood Company reported the following: 20Y9 20Y8 Sales $7,906,000 $6,726,000 Accounts receivable: Beginning of year 600,000 540,000 End of year 580,000 600,000 a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round answers to one decimal place.

Answer 1

Accounts receivable for 2019 = $590,000

Accounts receivable for 2018 = $570,000

Step-by-step explanation:

The computation of accounts receivable for both years is shown below:-

2019 2018

Sales $7,906,000 $6,726,000

Accounts receivable

Beginning balance $600,000 $540,000

Ending balance $580,000 $600,000

Accounts receivable $590,000 $570,000

Working note:-

Average Accounts receivable for 2019 = ($600,000 + $580,000) ÷ 2

= $590,000

Average Accounts receivable for 2018 = ($540,000 + $600,000) ÷ 2

= $570,000