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12 September, 11:54

Beverage International reports net credit sales for the year of $252,000. The company's accounts receivable balance at the beginning of the year equaled $48,000 and the balance at the end of the year equaled $58,000. What is Beverage International's receivables turnover ratio

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  1. 12 September, 12:50
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    4.8

    Explanation:

    The formular to find the receivable turn over ratio is

    = net credit sales/average.

    account receivable

    The values given are:

    Net credit sales for the year=$252,000

    Company account receivable balance at the beginning of the year = $48,000

    Company account receivable balance at the end of the year = $58,000

    To find the average account receivable we will sum both balance and divide by 2

    = 48,000+58,000/2

    = 106,000/2

    = $53,000

    Average account receivable is $53,000

    Therefore, receivable turn over ratio is

    = $252,000/$53,000

    = 4.8

    Thus, Beverage international's receivables turn over ratio is 4.8
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