(4) Stark Company a. Stark Company has computed its accounts receivable turnover
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Question
(4) Stark Companya. Stark Company has computed its accounts receivable turnover in days to be 36. Compute the accounts receivable turnover per year.
b. Stark Company has computed its accounts receivable turnover per year to be 10. Compute the accounts receivable turnover in days.
c. Stark Company has gross receivables at the end of the year of $380,000 and net sales for the year of $1,850,000. Compute the days' sales in receivables at the end of the year.
d. Stark Company has net sales of $2,500,000 and average gross receivables of $224,000. Compute the accounts receivable turnover.
Explanation / Answer
a) ART = 36 days ART per year = 365/36 = 10.14 (ANSWER) b) ART per year = 10 ART in days = 365/10 = 36.5 days,(say, 37 days) (ANSWER) c) Days sales in Receivables = Gross Receivables/Sales * 365 = 380000/1850000 *365 = 74.97 = 75 days (ANSWER) d) ART per year = Sales/Gross Receivables = 2500000/224000 = 11.16 (ANSWER)
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