Question

For the fiscal years 1 and 2, Grange Co. reported the following: Year Ended December 31, Year 1 Year 2 Sales $44,123,486 $34,124,961 Accounts receivable 749,321 719,365 a. Compute the accounts receivable turnover for Year 2. Round your answer to two decimal places.

Answer 1

Answer:

94.88 times

Explanation:

Accounts receivable turnover is computed as;

= Net credit sales / Average account receivables

Where average accounts receivables = Opening account receivable + closing account receivable / 2

• Year 2 accounts receivable turnover

Net credit sales = $34,124,961

Average accounts receivable = $719,365/2

= $359,682.5

= $34,124,961 / $359,682.5

= 94.88 times

Therefore, the accounts receivable turnover for year 2 is 94.88 times