Exhibit 4-1 Given the following information for Blue Bell Company:
-Refer to Exhibit 4-1. Blue Bell's accounts receivable turnover for 2014 was
A) 2.2 times
B) 26.0 times
C) 27.4 times
D) 28.9 times

Question

Exhibit 4-1 Given the following information for Blue Bell Company:  
-Refer to Exhibit 4-1. Blue Bell's accounts receivable turnover for 2014 was
A) 2.2 times 
B) 26.0 times 
C) 27.4 times 
D) 28.9 times

Quizplus · Accepted Answer

To calculate accounts receivable turnover, we divide net credit sales for the year by the average accounts receivable balance for the year. In this case, Blue Bell's net credit sales for 2014 are $1,200,000 and the average accounts receivable balance for the year is $43,800 ($30,000 beginning balance + $50,000 ending balance/2). Therefore, the accounts receivable turnover is 27.4 times ($1,200,000 / $43,800).

Exhibit 4-1 Given the Following Information for Blue Bell Company