Question

Treadwell Tire Company had net accounts receivable of $67,900 at the beginning of the year and $72,400 at the end of the year. The company's net sales revenue during the year was $876,875. What was the receivables turnover ratio for the year

Answer 1

12.50

Step-by-step explanation:

Data provided

Accounts receivable = $67,900

Beginning of the year = $72,400

Sales revenue during the year = $876,875

The computation of the receivables turnover ratio for the year is shown below:-

Average receivables = (Accounts receivable + Beginning of the year) ÷ 2

($67,900 + $72,400) ÷ 2

= $70,150

Receivables Turnover ratio = Sales revenue during the year ÷ Average receivables

= $876,875 ÷ $70,150

= 12.50