Financial statements for Marcial Company appear below:

-Marcial Company's average sale period (turnover in days)for Year 2 was closest to which of the following?

Question

Financial statements for Marcial Company appear below:

-Marcial Company's average sale period (turnover in days)for Year 2 was closest to which of the following?

Quizplus · Accepted Answer

To calculate the average sale period (turnover in days), we need to divide the average accounts receivable by the average daily sales.

Average accounts receivable can be calculated as:
(A/R at the beginning of the year + A/R at the end of the year) / 2
= ($226,000 + $272,000) / 2 
= $249,000

Average daily sales can be calculated as:
Net sales / 365
= $3,660,000 / 365 
= $10,027.40

Now, we can calculate the average sale period as:
Average accounts receivable / Average daily sales
= $249,000 / $10,027.40
= 24.8 days (rounded to one decimal place)

Therefore, the closest answer is D) 43.2 days.

Financial Statements for Marcial Company Appear Below