Beverage International reports net credit sales for the year of $240,000.The company's accounts receivable balance at the beginning of the year equaled $20,000 and the balance at the end of the year equaled $30,000.What is Beverage International's receivables turnover ratio?

Question

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Receivables turnover ratio = Net credit sales / Average accounts receivable

Average accounts receivable = (Beginning accounts receivable + Ending accounts receivable) / 2

Average accounts receivable = ($20,000 + $30,000) / 2 = $25,000

Receivables turnover ratio = $240,000 / $25,000

Receivables turnover ratio = 9.6

Beverage International Reports Net Credit Sales for the Year of $240,000.The