The controller of Peabody, Inc. has been asked to present an analysis of accounts receivable collections at the upcoming staff meeting. The following information is used:
|
12/31, year 2 |
12/31, year 1 |
|
|
Accounts receivable |
$100,000 |
$130,000 |
|
Allowance, doubtful accounts |
(20,000) |
(40,000) |
|
Sales |
400,000 |
200,000 |
|
Cost of goods sold |
350,000 |
170,000 |
What is the receivables turnover ratio as of December 31, year 2?
- 5.0
- 4.7
- 3.5
- 0.6