Financial statements for Marcalo Company appear below:
-Marcalo Company's accounts receivable turnover for Year 2 was closest to:
A) 12.4
B) 12.2
C) 8.5
D) 17.8

Question

Financial statements for Marcalo Company appear below:  
-Marcalo Company's accounts receivable turnover for Year 2 was closest to:
A) 12.4 
B) 12.2 
C) 8.5 
D) 17.8

Quizplus · Accepted Answer

Accounts receivable turnover = Net credit sales / Average accounts receivable
= 1,446,500 / [(54,000 + 43,000) / 2]
= 1,446,500 / 48,500
= 29.83 times
Average collection period = 365 days / Accounts receivable turnover
= 365 / 29.83
= 12.21 (rounded to one decimal place)
Therefore, the accounts receivable turnover for Year 2 is closest to 12.2 (Option B).

Financial Statements for Marcalo Company Appear Below