Guttery Corporation has provided the following financial data from its balance sheet:
Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000.
-The company's accounts receivable turnover for Year 2 is closest to:
A) 12.95
B) 1.02
C) 0.98
D) 13.06

Question

Guttery Corporation has provided the following financial data from its balance sheet:
  Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000.
-The company's accounts receivable turnover for Year 2 is closest to:
A) 12.95 
B) 1.02 
C) 0.98 
D) 13.06

Quizplus · Accepted Answer

Accounts receivable turnover = Sales on account ÷ Average accounts receivable*
= $1,450,000 ÷ $111,000 = 13.06 (rounded)
*Average accounts receivable =
($112,000 + $110,000) ÷ 2 = $111,000

Guttery Corporation Has Provided the Following Financial Data from Its