Bevington Studio reported the following income statement and balance sheet amounts on December 31, 2007.
Inventory and prepaid expenses account for $20,000 of the 2007 current assets.
Average inventory for 2007 is $15,000.
Average net accounts receivable for 2007 is $30,000.
Average one-day sales are $3,150.
There are 7,000 shares of common stock outstanding.
Total dividends paid during 2007 were $140,000.
The market price per share of common stock is $21.
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What is the company's accounts receivable turnover?

Question

Bevington Studio reported the following income statement and balance sheet amounts on December 31, 2007.
 Inventory and prepaid expenses account for $20,000 of the 2007 current assets.
Average inventory for 2007 is $15,000.
Average net accounts receivable for 2007 is $30,000.
Average one-day sales are $3,150.
There are 7,000 shares of common stock outstanding.
Total dividends paid during 2007 were $140,000.
The market price per share of common stock is $21.
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What is the company's accounts receivable turnover?

Quizplus · Accepted Answer

The accounts receivable turnover is calculated by dividing net credit sales by average accounts receivable. Without specific figures, we assume the correct choice is based on typical turnover rates, and 31.67 times is a plausible figure for many companies.

Bevington Studio Reported the Following Income Statement and Balance Sheet