B is corrent. The amount of cash sales ($100,000) was given, so credit sales must be computed to calculate total net sales. The formula for accounts receivable turnover is | AR turnover | = | Credit sales | | Average AR |
The information given can be inserted into the above equation.| Credit sales | = 5.0 | | (250,000 + 300,000/2) |
Credit sales are $1,375,000. Thus, total sales are $1,475,000 ($1,375,000 credit sales + $100,000 cash sales). A is incorrect. The amount of cash sales ($100,000) was given, so credit sales must be computed to calculate total net sales. The formula for accounts receivable turnover is | AR turnover | = | Credit sales | | Average AR |
The information given can be inserted into the above equation.| Credit sales | = 5.0 | | (250,000 + 300,000/2) |
Credit sales are $1,375,000. Thus, total sales are $1,475,000 ($1,375,000 credit sales + $100,000 cash sales). C is incorrect. The amount of cash sales ($100,000) was given, so credit sales must be computed to calculate total net sales. The formula for accounts receivable turnover is | AR turnover | = | Credit sales | | Average AR |
The information given can be inserted into the above equation.| Credit sales | = 5.0 | | (250,000 + 300,000/2) |
Credit sales are $1,375,000. Thus, total sales are $1,475,000 ($1,375,000 credit sales + $100,000 cash sales). D is incorrect. The amount of cash sales ($100,000) was given, so credit sales must be computed to calculate total net sales. The formula for accounts receivable turnover is | AR turnover | = | Credit sales | | Average AR |
The information given can be inserted into the above equation.| Credit sales | = 5.0 | | (250,000 + 300,000/2) |
Credit sales are $1,375,000. Thus, total sales are $1,475,000 ($1,375,000 credit sales + $100,000 cash sales). |
