Patton Corporation had the following items on its financial statements for two recent years: Line Item Description Year 2 Year 1 Sales $2,500,000 $2,000,000 Cost of goods sold 1,975,000 1,600,000 Cash 500,000 475,000 Temporary investments 150,000 150,000 Accounts receivable (net) 200,000 175,000 Inventory 325,000 300,000 Accounts payable 450,000 400,000 Based on these data, calculate Patton Corporation’s accounts receivable turnover for Year 2. a. 6.7 b. 12.5 c. 14.3 d. None of these choices are correct
Patton Corporation had the following items on its financial statements for two recent years: Line Item Description Year 2 Year 1 Sales $2,500,000 $2,000,000 Cost of goods sold 1,975,000 1,600,000 Cash 500,000 475,000 Temporary investments 150,000 150,000 Accounts receivable (net) 200,000 175,000 Inventory 325,000 300,000 Accounts payable 450,000 400,000 Based on these data, calculate Patton Corporation’s accounts receivable turnover for Year 2. a. 6.7 b. 12.5 c. 14.3 d. None of these choices are correct
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Patton Corporation had the following items on its financial statements for two recent years:
| Line Item Description | Year 2 | Year 1 |
|---|---|---|
| Sales | $2,500,000 | $2,000,000 |
| Cost of goods sold | 1,975,000 | 1,600,000 |
| Cash | 500,000 | 475,000 |
| Temporary investments | 150,000 | 150,000 |
| 200,000 | 175,000 | |
| Inventory | 325,000 | 300,000 |
| Accounts payable | 450,000 | 400,000 |
Based on these data, calculate Patton Corporation’s accounts receivable turnover for Year 2.
a. 6.7
b. 12.5
c. 14.3
d. None of these choices are correct
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