Rainsoft Company Selected Data from the Financial Statements Are Provided

question 51

Multiple Choice

Rainsoft Company Selected data from the financial statements are provided below:
$\begin{array}{llc}& \underline { 2015 }& \underline { 2014 }& \underline {2013 }\\ \text { Cash } &\$ 44,000 & \$ 28,000 & \$ 14,000 \\ \text { AccountsReceivable } &84,000 & 32,000 & 114,400 \\ \text { Inventory } &44,000 & 166,000 & 100,000 \\ \text {Prepaid Expenses } &\underline {46,000} & \underline {36,000} & \underline {41.600}\\ \text { Total Curent Assets } &\$ 218,000 & \$ 262,000 & \$ 270,000\\\\ \text { Total Current Liabilities } &\$ 130,000 & \$ 144,000 \\ \text { Net Credit Sales } &442,000 & 652,000 \\ \text { Cost of Goods Sold } &336,000 & 598,000 \\ \text { Net Cash Flows from Operating Activities } &32,000 & 58,000\end{array}$
-Refer to Rainsoft Company.Assume that competitors in the industry have an average accounts receivable turnover ratio of 7.8 times in 2015.What is the company's accounts receivable turnover ratio for 2015?

• A)5.26
• B)7.62
• C)7.80
• D)8.91

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Definitions:

Optimum

Refers to the best or most favorable condition, value, or level of something.

Budget Constraint

A budget constraint represents the combination of goods and services that a consumer can purchase with their limited income.

Indifference Curves

In consumer theory, a graph showing combinations of goods or services among which a consumer is indifferent, reflecting preferences.

Optimum

The condition or outcome that is most favorable or efficient under the given circumstances.