Question

Q 8.32: The financial statements of the Otter Company report net sales of $800,000 and accounts receivable of $40,000 and $20,000 at the beginning of the year and end of year, respectively. What is the accounts receivable turnover for the Otter Company

Answer 1

26.67 times

Step-by-step explanation:

The financial statements of the Otter company reports a net sales of $800,000

The account receivables at the beginning of the year is $40,000

The account receivables at the end of the year is $20,000

Therefore, the account receivable turnover for the Otter company can be calculated as follows

= $800,000/($40,000+$20,000/2)

= $800,000/($60,000/2)

= $800,000/$30,000

= 26.67 times

Hence the account receivable turnover for the Otter company is 26.67 times