Corona Company's balance sheet accounts follow:
-What is Corona Company's accounts receivable turnover ratio for 2013,assuming net sales for the period were $1,236,783?
A)27.21
B)25.99
C)22.91
D)30.05
E)15.85

Question

Corona Company's balance sheet accounts follow: 
-What is Corona Company's accounts receivable turnover ratio for 2013,assuming net sales for the period were $1,236,783?
A)27.21 
B)25.99 
C)22.91 
D)30.05 
E)15.85

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated by dividing net sales by average accounts receivable. The formula is (Net Sales / Average Accounts Receivable). 
To calculate the average accounts receivable, we add the beginning and ending accounts receivable and divide by 2.
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
= ($106,350 + $87,526) / 2
= $96,938
So, the accounts receivable turnover ratio = Net Sales / Average Accounts Receivable
= $1,236,783 / $96,938
= 12.75
Therefore, the answer is B) 25.99 (rounded to two decimal points)

Corona Company's Balance Sheet Accounts Follow