2012 Accounts receivable Inventory Net credit sales Cost of

2012 Accounts receivable Inventory Net credit sales Cost of goods sold Net income S 460,000 280,000 2,470,000 1,860,000 300,000 S 500,000 320,000 1,400,000 1,060,000 170,000 The following information is available for Compton Company: The receivables turnover ratio for 2012 is 1.6 times 5.4 times 5.1 times 3.9 times.

Solution

Receivables Turnover Ratio = Net Credit Sales / Average Accounts Receivables

Net Credit Sales = $24,70,000

Average Accounts Receivables = ($460,000 + 500,000)/2 = $480,000

Therefore, Receivables Turnover Ratio

= $24,70,000 / $480,000

= 5.1 Times

\" Hence, Receivables Turnover Ratio for 2012 = 5.1 Times \"