Using the information provided,what is the accounts receivable turnover for the firm? Perfect Purchase Electronics
Selected Income Statement Items,2014
Cash Sales $1,500,000
Credit Sales $7,500,000
Total Sales $9,000,000
COGS $6,000,000
Perfect Purchase Electronics
Selected Balance Sheet Accounts
12/31/2014 12/31/2013 Change
Accounts Receivable $270,000 $240,000 $30,000
Inventory $125,000 $100,000 $25,000
Accounts Payable $110,000 $90,000 $20,000
A)23.53 times
B)29.41 times
C)53.33 times
D)60.00 times

Question

Quizplus · Accepted Answer

Accounts receivable turnover = net credit sales / average accounts receivable
Average accounts receivable = (beginning accounts receivable + ending accounts receivable) / 2 = ($240,000 + $270,000) / 2 = $255,000
Net credit sales = total sales - cash sales = $9,000,000 - $1,500,000 = $7,500,000
Accounts receivable turnover = $7,500,000 / $255,000 = 29.41 times. Therefore, the best choice is B.

Using the Information Provided,what Is the Accounts Receivable Turnover for the Firm