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16 August, 10:13

The following information is from the annual financial statements of Raheem Company. 2017 2016 2015 Net sales $ 445,000 $ 376,000 $ 421,000 Accounts receivable, net (year-end) 43,000 40,800 37,500 Compute its accounts receivable turnover for 2016 and 2017.

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  1. 16 August, 10:19
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    9.60; 10.62

    Explanation:

    In 2016:

    Average accounts receivables:

    = (Beginning accounts receivable + Ending accounts receivable) : 2

    = (37,500 + 40,800) : 2

    = 39,150

    Accounts receivable turnover = Net sales : Average accounts receivables

    = $376,000 : 39,150

    = 9.60

    In 2017:

    Average accounts receivables:

    = (Beginning accounts receivable + Ending accounts receivable) : 2

    = (40,800 + 43,000) : 2

    = 41,900

    Accounts receivable turnover = Net sales : Average accounts receivables

    = $445,000 : 41,900

    = 10.62
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