Using the data from E4-39B, calculate the accounts receivable turnover ratio for 2009. On average, how many days does it take Runnels’ Art Supply to collect its accounts receivable?
In E4-39B, At the beginning of 2009, Runnels’ Art Supply had the following account balances: accounts receivable, $285,000, and allowance for uncollectible accounts, $(8,250). During the year, net credit sales were $946,750, cash collections on accounts receivable amounted to $600,000 and $5,750 of specific customer accounts were written off. At year end, Runnels’ estimated that 2.5% of net credit sales were uncollectible.