Excerpts from Zorra Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,370 and the cost of goods sold was $850.
-The accounts receivable turnover for Year 2 is closest to:
A)6.85
B)0.87
C)1.15
D)6.37

Question

Excerpts from Zorra Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,370 and the cost of goods sold was $850.
-The accounts receivable turnover for Year 2 is closest to:
A)6.85 
B)0.87 
C)1.15 
D)6.37

Quizplus · Accepted Answer

Accounts receivable turnover = Sales on account F1F1F1S1F1F1F10 Average accounts receivable balance
= $1,370 F1F1F1S1F1F1F10 $215* = 6.37
*Average accounts receivable balance = ($200 + $230)F1F1F1S1F1F1F10 2 = $215

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