Ordonez Lumber Yard has a current accounts receivable balance of $439,016. Credit sales for the year...

Ordonez Lumber Yard has a current accounts receivable balance of $439,016. Credit sales for the year just ended were $5,384,500.

What is the receivables turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Receivables turnover _______ times

What is the days’ sales in receivables? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Days’ sales in receivables ________ days

How long did it take on average for credit customers to pay off their accounts during the past year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Average collection period ______ days

Solutions

Expert Solution

Receivable turnover ratio = Net credit sales / Accounts receivable

= 5,384,500/439,016

= 12.26 times

Days sale in receivables =( Accounts receivable / Net credit sales)*365

= (439,016/5,384,500)*365

= 5.30 days

Average collection period = 365/Account receivable turnover ratio

= 365/12.26

= 29.77 days

jeff jeffy answered 2 years ago

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