Dana Company's December 31, 2012, financial statements showed the following:

- Refer to Exhibit 6-1. Given the information above, Dana Company's accounts receivable turnover ratio for 2012 was

Question

Dana Company's December 31, 2012, financial statements showed the following:

- Refer to Exhibit 6-1. Given the information above, Dana Company's accounts receivable turnover ratio for 2012 was

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated as net credit sales divided by average accounts receivable. Using the information given in Exhibit 6-1, the calculation would be:

Accounts receivable turnover ratio = $2,400,000 / (($400,000 + $300,000) / 2) = $2,400,000 / $350,000 = 6.857

Rounded to one decimal place, the accounts receivable turnover ratio for 2012 is 6.0. Therefore, the best answer choice is B) 6.0.

Dana Company's December 31, 2012, Financial Statements Showed the Following