The following information is available for Oakland Company: $\begin{array}{lrr}&2017&2016\
\text { Accounts receivable } & \$ 430,000 & \$ 460,000 \
\text { Inventory } & 280,000 & 320,000 \
\text { Net credit sales } & 2,670,000 & 1,600,000 \
\text { Cost of goods sold } & 1,860,000 & 1,060,000 \
\text { Net income } & 300,000 & 170,000
\end{array}$ The accounts receivable turnover ratio for 2017 is
A) 1.4 times.
B) 6.2 times.
C) 6.0 times.
D) 5.8 times.

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated by dividing net credit sales by average accounts receivable. The average accounts receivable is calculated by adding the beginning and ending accounts receivable balances and dividing by 2. For 2017, the average accounts receivable is ($430,000 + $460,000) / 2 = $445,000. The accounts receivable turnover ratio for 2017 is $2,670,000 / $445,000 = 6.0 times.

The Following Information Is Available for Oakland Company The Accounts Receivable Turnover Ratio for 2017 Is A) 1

The Following Information Is Available for Oakland Company The Accounts Receivable Turnover Ratio for 2017 Is
A) 1