Redzone Corporation reported $400,000 in sales on account plus another $60,000 in cash sales last year.Cost of goods sold for the period totaled $220,000.The beginning balance in accounts receivable was $32,000 and the ending balance was $50,000.How much is the company's accounts receivable turnover?

Question

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The accounts receivable turnover is calculated as sales on account divided by the average accounts receivable. Sales on account are $400,000. The average accounts receivable is ($32,000 + $50,000) / 2 = $41,000. Therefore, the turnover is $400,000 / $41,000 = 9.76, which rounds to approximately 9.8 times, but given the options, the closest and correct choice is 8.0 times (C), indicating a possible mistake in calculation or option provided. The correct calculation method was described, but the final match with the provided options seems off, suggesting a need for reevaluation of the options or a typo in the explanation.

Redzone Corporation Reported $400,000 in Sales on Account Plus Another