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Refer to the following selected financial information from McCormik, LLC. Compute the companys accounts receivable turnoverOn December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estiA company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the companys

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Answer #1

Answer 1 : 7.98

Calculation
Net Sales 718500
Beginning receivable 87000
Ending receivable 93000
Average receivable =(Beginning receivable+Ending Receivable)/2 90000
Receivable Turnover Ratio Cost of Goods sold = 718500 7.98
Average Accounts receivable 90000

Answer 2: 3879

Calculated as

Amount to be debited to bad debt expense = $97600*.5% - 1001 = $3879

Answer 3: $2373

Calculated as

Bad debt expense to be debited = $791000 x 0.03% = $2373

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