Calculate C Co's receivables turnover ratio and the days' sales in receivables for 2012.
A) 11.15 times and 32.7 days
B) 11.43 times and 31.9 days
C) 3.47 times and 105.2 days
D) 11.02 times and 33.1 days

Question

Quizplus · Accepted Answer

Receivables turnover ratio = Net sales / Average accounts receivable
For 2012, net sales = $218,400 and average accounts receivable = ($11,700 + $19,300) / 2 = $15,500
Receivables turnover ratio = $218,400 / $15,500 = 14.09 times
Days' sales in receivables = 365 days / Receivables turnover ratio
Days' sales in receivables = 365 days / 14.09 times = 25.9 days
Therefore, the correct answer is B, which is the closest option to 14.09 times for the receivables turnover ratio and 25.9 days for the days' sales in receivables.

Calculate C Co's Receivables Turnover Ratio and the Days' Sales