Universal Sports Supply began the year with an accounts receivable balance of $130,000 and a year-end balance of $150,000. Credit sales of $645,000 generate a gross profit of $215,000. Calculate the receivables turnover ratio for the year. (Round your final answer to 1 decimal place.)

The answer is 4.6

Explanation:

The formula for receivable turnover equals:

Net sales (credit sales) ÷ average accounts receivable

Average accounts receivable =

($130,000 + $150,000) ÷ 2

$280,000 ÷ 2

= $140,000

Therefore, receivables turnover ratio is

$645,000/$140,000

= 4.6

$3.48

Explanation:

Net income ÷Shares of common stock outstanding + Preferred stock convertible shares of common stock.

Net income 6,800,000

Shares of common stock outstanding 1,200,000

Preferred stock convertible 750,000

Hence:

$6,800,000/ ($1,200,000 + $750,000)

=$6,800,000/$1,950,000

=$3.48

Therefore the diluted earnings per share for 2021 is $3.48