Condensed Financial Data Are Presented Below for the Phoenix Corporation

question 119

Multiple Choice

Condensed financial data are presented below for the Phoenix Corporation:
$\begin{array}{lrr}&2014&2013\\\text { Accounts receivable } & \$ 267,500 & \$ 230,000 \\\text { Inventory } & 312,500 & 257,500 \\\text { Total current assets } & 670,000 & 565,000 \\\text { Intangible assets } & 50,000 & 60,000 \\\text { Total assets } & 825,000 & 695,000 \\\text { Current liabilities } & 252,500 & 200,000 \\\text { Long-term liabilities } & 77,500 & 75,000 \\\text { Sales } & 1,640,000 & \\\text { Cost of goods sold } & 982,500 & \\\text { Interest expense } & 10,000 & \\\text { Income tax expense } & 77,500 & \\\text { Net income } & 127,500 & \\\text { Cash flow from operations } & 71,000 & \\\text { Cash flow from investing activities } & (6,000) & \\\text { Cash flow from financing activities } & (62,500) & \\\text { Tax rate } & 30 \% &\end{array}$
-The accounts receivable turnover for 2014 is (rounded) :
(Assume all sales are on account.)

• A)2.0 times.
• B)6.4 times.
• C)6.6 times.
• D)7.1 times.

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Definitions:

Manufacturing Overhead Cost

Indirect costs related to manufacturing that are not directly tied to a specific product, such as factory maintenance and utilities.

Normal Costing System

An accounting system that assigns costs to products based on the normal levels of materials, labor, and overhead.

Inventory Accounts

Accounts used to track the cost of goods a company has in stock during an accounting period, including raw materials, work in progress, and finished goods.

Actual Overhead Costs

The real costs that a company incurs for its indirect materials, indirect labor, and other overhead expenses.