Question

Alliance Software began 2021 with accounts receivable of $131,000. All sales are made on credit. Sales...

Alliance Software began 2021 with accounts receivable of $131,000. All sales are made on credit. Sales and cash collections from customers for the year were $796,000 and $716,000, respectively. Cost of goods sold for the year was $466,000. What was Alliance's receivables turnover ratio (rounded) for 2021?

a. 3.77

b. 4.65

c. 2.8

d. 6.08

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Given:- Accounts receivable in the beggining = $131,000; Credit sales = $796,000; Cash collections = $716,000;

Required:- Receivables Turnover Ratio

Computation of Accounts receivable (closing balance) = Opening balance + Credit sales - Cash collections

= 131,000 + 796,000 - 716,000

= $211,000

Average account receivables = (Sum of accounts receivable in the beggining and end of the year) / 2

= (131,000+211,000)/2

= 171,000

Receivables Turnover Ratio = Net credit sales / Average account Receivables

= 796,000 / 171,000

= 4.65 ( rounded)

The correct option is b) 4.65

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Hazard Company began 2021 with a credit balance of $116,000 in the refund liability account. Sales...
Hazard Company began 2021 with a credit balance of $116,000 in the refund liability account. Sales and cash collections from customers during the year were $1,750,000 and $1,410,000, respectively. During 2021, customers returned merchandise for credit of $67,000 to their accounts. The balance in the refund liability account at the end of 2021 was $136,500. What percent of sales in 2021 does Hazard estimate to be returned? Multiple Choice 3% 5% 6% 4%
During the current accounting period, revenue from credit sales is $791,000. The accounts receivable balance is...
During the current accounting period, revenue from credit sales is $791,000. The accounts receivable balance is $52,680 at the beginning of the period and $64,200 at the end of the period. Which of the following statements is correct? The receivables turnover ratio is 27.1. On average, it takes 13.5 days to collect payment from credit customers. The receivables turnover ratio is 13.5. On average, the company sells its inventory every 27.07 days.
At December 31, 2021, Splish Brothers Inc. reported this information on its balance sheet. Accounts receivable...
At December 31, 2021, Splish Brothers Inc. reported this information on its balance sheet. Accounts receivable $581,000 Less: Allowance for doubtful accounts 37,000 During 2022, the company had the following transactions related to receivables. 1. Sales on account $2,355,000 2. Sales returns and allowances 49,000 3. Collections of accounts receivable 2,050,000 4. Write-offs of accounts receivable deemed uncollectible 38,000 5. Recovery of bad debts previously written off as uncollectible 16,000 Compute the accounts receivable turnover and average collection period, assuming...
Information follows for Carra Company: 1. The beginning-of-the-year Accounts Receivable balance was $25,000. 2. Net sales...
Information follows for Carra Company: 1. The beginning-of-the-year Accounts Receivable balance was $25,000. 2. Net sales for the year were $410,000. (Credit sales were $200,000 of the total sales.) Carra does not offer cash discounts. 3. Collections on accounts receivable during the year were $140,000. Required: (a) Prepare summary journal entries to record the items noted above. (b) Calculate Carra Company's accounts receivable turnover ratio for the year. How old is the average receivable in days? (c) Use the turnover...
Beverage International reports net credit sales for the year of $336,000. The company's accounts receivable balance...
Beverage International reports net credit sales for the year of $336,000. The company's accounts receivable balance at the beginning of the year equaled $27,000 and the balance at the end of the year equaled $37,000. What is Beverage International's receivables turnover ratio? (Round your answer to 1 decimal place.) Multiple Choice 12.4. 10.5. 9.1. 1.4.
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $131,000 November 164,000 December 240,000...
At December 31, 2021, Ivanhoe Imports reported this information on its balance sheet. Accounts receivable $615,000...
At December 31, 2021, Ivanhoe Imports reported this information on its balance sheet. Accounts receivable $615,000 Less: Allowance for doubtful accounts 35,000 During 2022, the company had the following transactions related to receivables. 1. Sales on account $3,020,000 2. Sales returns and allowances 50,000 3. Collections of accounts receivable 2,720,000 4. Write-offs of accounts receivable deemed uncollectible 45,000 5. Recovery of bad debts previously written off as uncollectible 21,000 (a) Prepare the journal entries to record each of these five...
Arwin Company revealed the following information for 2020: Accounts receivable on January 650,000 Credit sales 2,700,000...
Arwin Company revealed the following information for 2020: Accounts receivable on January 650,000 Credit sales 2,700,000 Sales returns 75,000 Collections from customers 2,150,000 Accounts written off 40,000 Estimated future sales returns at year-end 50,000 Estimated uncollectible accounts receivable at year-end per aging 110,000 On December 31, 2020, what is the balance of accounts receivable before allowance for doubtful accounts and allowance for sales returns?
credit sales = $8,000. Beginning and ending accounts receivable = $1,800 and $1,400, respectively. What are...
credit sales = $8,000. Beginning and ending accounts receivable = $1,800 and $1,400, respectively. What are collections and the age of accounts receivable, assuming a 360-day year? A. $7,600 and 36 days. B. $7,600 and 72 days. C. $8,000 and 10 days. D. $8,400 and 36 days. E. $8,400 and 72 days.
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts...
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts receivable totaled $690,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $45,000 at the beginning of 2021 and $27,500 in receivables were written off during the year as uncollectible. Also, $2,500 in cash was received in December from a customer whose account previously had been written off. The company estimates bad debts...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT