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14 October, 18:01

The following information is from the annual financial statements of Nancy Company.

2013 2012 2011

Net sales $357,000 $278,000 $325,000

Account receivable, net (year-end) 52,900 49,700 46,400

What is the accounts receivable turnover ratio for 2012?

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  1. 14 October, 18:27
    0
    5.79 times

    Explanation:

    The computation of the Accounts receivable turnover ratio

    = Credit sales : average accounts receivable

    where,

    Average accounts receivable = (Opening balance of Accounts receivable + ending balance of Accounts receivable) : 2

    = ($46,400 + $49,700) : 2

    = $48,050

    And, the net credit sale is $278,000

    Now put these values to the above formula

    So, the answer would be equal to

    = $278,000 : $48,050

    = 5.79 times
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