The financial statements of the Phelps Manufacturing Company report net sales of $600,000 and accounts receivable of $80,000 and $40,000 at the beginning of the year and the end of the year, respectively.What is the accounts receivable turnover for Phelps?

Question

Quizplus · Accepted Answer

The accounts receivable turnover is calculated as net sales divided by average accounts receivable. The average accounts receivable is ($80,000 + $40,000) / 2 = $60,000. Therefore, the turnover is $600,000 / $60,000 = 10.0 times.

The Financial Statements of the Phelps Manufacturing Company Report Net