Taxes receivable classified as a/notes If net sales is $550,000, beginning inventory is $110,000, and ending...

Question

Question

Taxes receivable classified as a/notes

business accounting

Answer 1

Answer #1

Solution:

The formula for calculating the accounts receivable turnover is

= Net Sales / Average inventory

= Net sales / [ ( Beginning Inventory + Ending Inventory ) / 2 ]

As per the information given in the question we have

Net sales = $ 550,000 ;

Beginning Inventory = $ 110,000 ; Ending Inventory = $ 125,000

Applying the available information in the formula we have

= $ 550,000 / [ ( $ 110,000 + $ 125,000) / 2 ]

= $ 550,000 / ( $ 235,000 / 2)

= $ 550,000 / $ 117,500

= 4.6809

= 4.7 ( when rounded off to one decimal place )

Thus the solution is Option a. 4.7

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Answer 2

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