LKN Company had net credit sales of $5,005,000 and cost of goods sold of $3,500,000 for the year.The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively.The accounts receivable turnover was

Question

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Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Average Accounts Receivable = ($600,000 + $7000,000) / 2 = $650,000
Accounts Receivable Turnover = $5,005,000 / $650,000 = 7.7 times. Therefore, the best choice is B.

LKN Company Had Net Credit Sales of $5,005,000 and Cost