Answer:
Dawnetta Fashions
The Accounts Receivable Turnover Ratio for Dawnetta Fashions is:
6 times.
Explanation:
a) Data and Calculations:
Accounts receivable, at the beginning = $300,000
Accounts receivable, at the ending = $200,000
Average receivable = $250,000 ($300,000 + 200,000)/2
Total credit sales = $1,500,000
Accounts Receivable Turnover = $1,500,000/$250,000 = 6 times
b) Dawnetta Fashions' Accounts Receivable Turnover Ratio gauges how efficiently the company's credit sales are collected by measuring how many times its receivables are converted to cash in the accounting period. It is obtained by dividing the net credit sales by the average accounts receivable for the period.
