McFadden Clothing Store reported the following selected items at June 30, 2017 (last year - 2016 - amounts are also given as needed)
Cash $ 80,000
Accounts Receivable, net:
June 30, 2017
June 30, 2016
45,000
53,000
Accounts Payable 55,000
Cost of Goods Sold 288,000
Merchandise Inventory
June 30, 2017
June 30, 2016
70,000
90,000
Net Credit Sales Revenue 480,000
Long-Term Assets 220,000
Long-Term Liabilities 140,000
Other Current Assets 150,000
Other Current Liabilities 130,000
Short-term Investments 40,000
Compute McFadden's accounts receivable turnover ratio 2017. Show your computations. (Round the answer to 2 decimal places. )
What will be an ideal response
Net credit sales / Average net accounts receivable
$480,000 / [(45,000 + 53,000 / 2 )]
480,000 / 49,000 = 9.80 times
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