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?

  1. 5.0
  2. 4.7
  3. 3.5
  4. 0.6