Question

The following information is from the annual financial statements of Raheem Company. 2017 2016 2015 Net sales $ 422,000 $ 353,000 $ 407,000 Accounts receivable, net (year-end) 21,500 19,300 16,000 Compute its accounts receivable turnover for 2016 and 2017.

Answer 1

For 2016 , Average Accounts Receivable =( 2015 Accounts Receivable + 2016Accounts Receivable) /2

= ( $ 16,000 + $ 19,300 ) / 2

= $ 17,650

For 2017, Average Accounts Receivable =( 2017 Accounts Receivable + 2016Accounts Receivable) /2

= ( $ 21,500 + $ 19,300 ) / 2

= $ 20,400

The  accounts receivable turnover = Sales / Average Accounts Receivable

2016 : $ 353,000 / $ 17,650

= 20

2017 : $ 422,000 / $ 20,400

= 20.68627451

= 20.69

Hence the correct answer is :

2016 = 20

2017 = 20.69