Peartree Company provides the following data:
$$\begin{array} { | l | r | r | }
\hline \text { BALANCE SHEET } & 31 \text { Dec } 2017 & 31 \text { Dec } 2016 \
\hline \text { Cash } & \$ 21000 & \$ 18000 \
\hline \text { Accounts receivable, net } & 31000 & 35000 \
\hline \text { Inventory } & 53000 & 25000 \
\hline \text { PP\&E, net } & 120000 & 90000 \
\hline \text { Total assets } & \$ 225000 & \$ 168000 \
\hline
\end{array}$$
Additional information:
• Net sales (all on account): $240 000
• Cost of sales: $110 000
How much is the accounts receivable turnover for 2017?

Question

Peartree Company provides the following data:
$$\begin{array} { | l | r | r | } 
\hline \text { BALANCE SHEET } & 31 \text { Dec } 2017 & 31 \text { Dec } 2016 \
\hline \text { Cash } & \$ 21000 & \$ 18000 \
\hline \text { Accounts receivable, net } & 31000 & 35000 \
\hline \text { Inventory } & 53000 & 25000 \
\hline \text { PP\&E, net } & 120000 & 90000 \
\hline \text { Total assets } & \$ 225000 & \$ 168000 \
\hline
\end{array}$$
Additional information:
• Net sales (all on account): $240 000
• Cost of sales: $110 000
How much is the accounts receivable turnover for 2017?

Quizplus · Accepted Answer

Accounts Receivable Turnover = Net Sales / Average Accounts Receivable
To find the average accounts receivable, we need to use the formula:
Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Assuming there were no other changes to the accounts receivable balance, we can use the formula:

Accounts Receivable Turnover = Net Sales / ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2)

We are given the net sales and cost of sales, but we are not given the beginning or ending accounts receivable balance. Therefore, we cannot calculate the accounts receivable turnover.

Peartree Company Provides the Following Data Additional Information: • Net Sales (All on Account): $240 000

Peartree Company Provides the Following Data Additional Information:
• Net Sales (All on Account): $240 000