Question

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.

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Answer #1

Given that,

Net credit sales is $336000,

Account receivables opening balance $27000,

Account receivables closing balance$37000.

receivables turnover ratio

= Net credit sales/ Average account receivables

=$336000 / $32000

=10.5

Working notes: calculation of average account receivables:

Average account receivables= (opening balance+closing balance)/2

=($27000+$37000)/2

=$32000

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