Refer to the following selected financial information from Fennie's, LLC. Compute the company's accounts receivable turnover for Year 2.
A) 8.32.
B) 8.62.
C) 8.94.
D) 5.78.
E) 7.90.

Question

Refer to the following selected financial information from Fennie's, LLC. Compute the company's accounts receivable turnover for Year 2. 
A) 8.32. 
B) 8.62. 
C) 8.94. 
D) 5.78. 
E) 7.90.

Quizplus · Accepted Answer

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2 = ($53,000 + $42,000) / 2 = $47,500

Net Credit Sales = Total Sales - Cash Sales = $340,000 - $98,000 = $242,000

Accounts Receivable Turnover = $242,000 / $47,500 = 8.62

Refer to the Following Selected Financial Information from Fennie's, LLC