Using the data from E4-26A, calculate the accounts receivable turnover ratio for 2011. On average, how many days does it take Darcy’s Floor Coverings to collect its accounts receivable?
In E4-26A, at the beginning of 2011, Darcy’s Floor Coverings had the following account balances: accounts receivable, $325,000 and allowance for uncollectible accounts, $(7,500). During the year, net credit sales were $793,250 and $10,000 of specific customer accounts were written off. Cash collections amounted to $1,000,000. At year end, Darcy’s estimated that 1% of net credit sales were uncollectible.