Question
36) Mr. Sparks, the owner of School Supplies, Inc., is interested in keeping control over accounts receivable. He understands that accounts receivable turnover will give
36)Mr. Sparks, the owner of School Supplies, Inc., is interested in keeping control over accounts receivable. He understands that accounts receivable turnover will give a good indication of how well receivables are being managed. School Supplies, Inc. does seventy percent of its business during June, July and August. The terms of sale are 2/10, n/60. Net sales for the year ended December 31, 20x9, and receivables balances are: Net Sales = $1,500,000; Receivables at January 1, 20x9 = $80,000; Receivables at December 31, 20x9 = $70,000. What is the average accounts receivable turnover calculated from the data above?Answers
20.0 times
25.0 times
22.7 times
18.75 times
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