The opening balance of Accounts Receivable for George Company was $25,000. Net sales (all on account) for the year amounted to $150,000. The Company doesn't offer any cash discount. During the year $130,000 was collected on accounts receivable. Compute accounts receivable turnover ratio for the year.

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The accounts receivable turnover ratio is calculated as Net Credit Sales / Average Accounts Receivable. Net sales are $150,000 (all on account, so they are also net credit sales). The opening balance of Accounts Receivable is $25,000, and after collections of $130,000, the ending balance is $45,000 ($25,000 + $150,000 - $130,000). The average accounts receivable is ($25,000 + $45,000) / 2 = $35,000. Therefore, the turnover ratio is $150,000 / $35,000 = 4.29 times.

The Opening Balance of Accounts Receivable for George Company Was