In: Accounting
Accounts Payable |
420 |
Accounts Receivable |
3,200 |
Capital Stock |
240 |
Cash |
100 |
Cost of Goods Sold |
600 |
Inventory |
380 |
Long-term Debt |
4,640 |
Net Income |
280 |
Property, Plant, and Equipment (net) |
1,400 |
Retained Earnings |
(220) |
Sales |
3,000 |
Note: The retained earnings amount reported is as of the END of the year (after the closing entries have been made).
Compute AVERAGE COLLECTION PERIOD (also called NUMBER OF DAYS’ SALES IN ACCOUNTS RECEIVABLE). Note: If you need to compute the average balance for any account, assume that the beginning-of-year balance is the same as the end-of-year balance reported above.
Group of answer choices
342.2 days
194.7 days
31.9 days
93.8 days
389.3 days
NUMBER OF DAYS’ SALES IN ACCOUNTS RECEIVABLE = Average accounts Receivable / Average daily sales | |||||||
=3200/8.22 | |||||||
=389.3 Days | |||||||
Average accounts receivable = (Opening Receivable + Closing receivable )/2 | |||||||
=(3200+3200)/2 | |||||||
=3200 | |||||||
Average Daily sales = Annual sales / No. of days in a year | |||||||
=3000/365 | |||||||
8.22 | |||||||