A company reports the following: Net sales$3,150,000 Average accounts receivable (net) 210,000

A company reports the following:

Net sales$3,150,000
Average accounts receivable (net) 210,000

Determine (a) the accounts receivable turnover and (b) the number of days’ sales in receivables. Round to one decimal place.

Answer:

a. Accounts Receivable Turnover  =  Net Sales ÷ Average Accounts Receivable 
Accounts Receivable Turnover  =  $3,150,000 ÷ $210,000 
Accounts Receivable Turnover  =  15.0 
Average Accounts Receivable 
Average Daily Sales 
$210,000 ÷ ($3,150,000 ÷ 365) 
$210,000 ÷ $8,630 
24.3 days 


A company reports the following:

Net sales $1,200,000

Average accounts receivable (net) 100,000

Determine (a) the accounts receivable turnover and (b) the number of days’ sales in receivables. Round to one decimal place.

Answer:












a. Accounts Receivable Turnover  =  Net Sales ÷ Average Accounts Receivable
Accounts Receivable Turnover  =  $1,200,000 ÷ $100,000
Accounts Receivable Turnover  =  12.0
b. Number of Days’ Sales in Receivables = Average Accounts Receivable
Average Daily Sales
Number of Days’ Sales in Receivables =   $100,000 ÷ ($1,200,000 ÷ 365)
=   $100,000 ÷ $3,288
Number of Days’ Sales in Receivables =   30.4 days