Peartree Company provides the following data: $$\begin{array} { | l | r | r | }
\hline \text { BALANCE SHEET } & 31 \text { Dec } 2017 & 31 \text { Dec } 2016 \
\hline \text { Cash } & \$ 21000 & \$ 18000 \
\hline \text { Accounts receivable, net } & 31000 & 35000 \
\hline \text { Inventory } & 53000 & 25000 \
\hline \text { PP\&E, net } & 120000 & 90000 \
\hline \text { Total assets } & \$ 225000 & \$ 168000 \
\hline
\end{array}$$ Additional information:
• Net sales (all on account): $240 000
• Cost of sales: $110 000
How much is the accounts receivable turnover for 2017?
A)7.07
B)1.55
C)7.27
D)0.76

Question

Peartree Company provides the following data: $$\begin{array} { | l | r | r | } 
\hline \text { BALANCE SHEET } & 31 \text { Dec } 2017 & 31 \text { Dec } 2016 \
\hline \text { Cash } & \$ 21000 & \$ 18000 \
\hline \text { Accounts receivable, net } & 31000 & 35000 \
\hline \text { Inventory } & 53000 & 25000 \
\hline \text { PP\&E, net } & 120000 & 90000 \
\hline \text { Total assets } & \$ 225000 & \$ 168000 \
\hline
\end{array}$$ Additional information:
• Net sales (all on account): $240 000
• Cost of sales: $110 000
How much is the accounts receivable turnover for 2017?
A)7.07
B)1.55
C)7.27
D)0.76

Quizplus · Accepted Answer

The accounts receivable turnover is calculated as Net Sales divided by Average Accounts Receivable. Average Accounts Receivable = (31,000 + 35,000) / 2 = 33,000. Accounts Receivable Turnover = 240,000 / 33,000 = 7.27.

Peartree Company Provides the Following Data Additional Information: • Net Sales (All on Account): $240 000

Peartree Company Provides the Following Data Additional Information:
• Net Sales (All on Account): $240 000