Ribaudo Corporation has provided the following financial data from its balance sheet and income statement:

-The company's average sale period (turnover in days) for Year 2 is closest to:
A)91.9 days
B)48.9 days
C)90.1 days
D)198.1 days

Question

Ribaudo Corporation has provided the following financial data from its balance sheet and income statement:

-The company's average sale period (turnover in days) for Year 2 is closest to:
A)91.9 days 
B)48.9 days 
C)90.1 days 
D)198.1 days

Quizplus · Accepted Answer

The formula for average sale period/turnover in days is: 
Average sale period = (Accounts receivable / Total credit sales) x Number of days in the year
Given, 
Accounts Receivable = $1,398,000 (Year 2)
Total Credit Sales = $8,425,000 (Year 2)
Number of days in the year = 365
Substituting the values in the formula, we get
Average sale period = (1,398,000/8,425,000) x 365
= 0.166 x 365
= 60.59 days (approx.)
Therefore, the closest option is A) 91.9 days.

Ribaudo Corporation Has Provided the Following Financial Data from Its