Excerpts from Colter Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The accounts receivable turnover for Year 2 is closest to:

Question

Excerpts from Colter Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,210 and the cost of goods sold was $720. The accounts receivable turnover for Year 2 is closest to:

Quizplus · Accepted Answer

Accounts receivable turnover = Sales on account ÷ Average accounts receivable balance
= $1,210 ÷ $105* = 11.52 (rounded)
*Average accounts receivable balance = ($100 + $110)÷ 2 = $105

Excerpts from Colter Corporation's Most Recent Balance Sheet Appear Below