B is corrent. The requirement is to calculate receivable turnover in days. Accounts receivable turnover in days is calculated as 365 divided by the accounts receivable turnover ratio. The accounts receivable turnover ratio is calculated as credit sales/average accounts receivable. In this case, accounts receivable turnover is equal to 12.7273 [$1,400,000 credit sales/($120,000 + $100,000/2)]. B is corrent because accounts receivable turnover in days is equal to 28.7 (365/12.7273).
A is incorrect. Accounts receivable turnover in days is calculated as 365 divided by the accounts receivable turnover ratio. The accounts receivable turnover ratio is calculated as credit sales/average accounts receivable. In this case, accounts receivable turnover is equal to 12.7273 [$1,400,000 credit sales/($120,000 + $100,000/2)]. This answer is correct because accounts receivable turnover in days is equal to 28.7 (365/12.7273).
C is incorrect. Accounts receivable turnover in days is calculated as 365 divided by the accounts receivable turnover ratio. The accounts receivable turnover ratio is calculated as credit sales/average accounts receivable. In this case, accounts receivable turnover is equal to 12.7273 [$1,400,000 credit sales/($120,000 + $100,000/2)]. This answer is correct because accounts receivable turnover in days is equal to 28.7 (365/12.7273).
D is incorrect. Accounts receivable turnover in days is calculated as 365 divided by the accounts receivable turnover ratio. The accounts receivable turnover ratio is calculated as credit sales/average accounts receivable. In this case, accounts receivable turnover is equal to 12.7273 [$1,400,000 credit sales/($120,000 + $100,000/2)]. This answer is correct because accounts receivable turnover in days is equal to 28.7 (365/12.7273).
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