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23 May, 21:06

Beverage International reports net credit sales for the year of $468,000. The company's accounts receivable balance at the beginning of the year equaled $24,000 and the balance at the end of the year equaled $34,000. What is Beverage International's receivables turnover ratio?

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  1. 23 May, 21:29
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    The Beverage International's receivables turnover ratio is = 16,14

    Explanation:

    The accounting receivable turnover formula is:

    Net credit sales / Average Accounts Receivable

    So Net credit sales = $468,000

    And Average Accounts Receivable = ($24,000 + $34,000) / 2 = $29.000,00

    The receivables turnover ratio is = $468,000 / $29.000,00 = 16,14
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