Potaw Company Reported the Following Data at the End of 2010

question 96

Multiple Choice

Potaw Company reported the following data at the end of 2010: $$\begin{array} { l r } \text { Sales revenue } ( 75 \% \text { on credit) } & \$ 300,000 \\\text { Expenses ( } 26 \% \text { on credit) } & 60,000 \\\text { Accounts receivable, net at December } 31,2010 \text { (a decrease } & \\\text { of } \$ 4,000 \text { during } 2010 ) & 8,000 \\\text { Total assets } & 200,000 \\\text { Stockholders' equity } & 150,000\end{array}$$ What was the accounts receivable turnover ratio?

• A)30.0
• B)37.5
• C)36.5
• D)22.5

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Definitions:

Present Value

The modern-day worth of an upcoming sum of money or series of cash receipts, factoring in a chosen rate of return.

Interest

The fee for the right to borrow money, usually stated as a yearly percentage rate.

Compounded Monthly

Describes an interest calculation method where interest is added to the principal sum of a deposit or loan each month, leading to interest on interest.

Annuity

A financial instrument designed to distribute a steady series of disbursements to a person, commonly utilized as a source of income during retirement.