Using the information provided,what is the accounts receivable turnover for the firm? Allied Industries, Inc.
Selected Income Statement Items, 2017
$\begin{array}{ll}
\text { Cash Sales } & \$ 1,500,000 \
\text { Credit Sales } & \$ 7,500,000 \
\text { Total Sales } & \$ 9,000,000 \
\text { COGS } & \$ 6,000,000
\end{array}$
Allied Industries, Inc.
Selected Balance Sheet Accounts
$\begin{array}{llll}
&12/31/2017 &12/31/2016&\text { Change }\
\text { Accounts Receivable } & \$ 270,000 & \$ 240,000 & \$ 30,000 \
\text { Inventory } & \$ 125,000 & \$ 100,000 & \$ 25,000 \
\text { Accounts Payable } & \$ 110,000 & \$ 90,000 & \$ 20,000
\end{array}$
A)23.53 times
B)29.41 times
C)53.33 times
D)60.00 times

Question

Quizplus · Accepted Answer

The accounts receivable turnover is calculated as total credit sales divided by the average accounts receivable. Total credit sales are $7,500,000. The average accounts receivable is calculated as ($270,000 + $240,000) / 2 = $255,000. Therefore, the accounts receivable turnover is $7,500,000 / $255,000 = 29.41 times.

Using the Information Provided,what Is the Accounts Receivable Turnover for the Firm