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4 October, 09:35

The financial statements of Vaughn Manufacturing Company report net sales of $643100 and accounts receivable of $92000 and $26000 at the beginning and end of the year, respectively. What is the accounts receivable turnover for Vaughn?

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  1. 4 October, 11:17
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    The correct answer is 10.9 times.

    Explanation:

    According to the scenario, computation of the given data are as follow:-

    Average account receivable = (Opening account receivable + Closing accounts receivable) : 2

    = ($92,000 + $26,000) : 2

    = $118,000 : 2

    = $59,000

    We can calculate the account receivable turnover by using following formula : -

    Accounts receivable turnover = Net sales : Average Account receivable

    = $643,100 : $59,000

    = 10.9 times
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