Accounts Payable 420 Accounts Receivable 3,200 Capital Stock 240 Cash 100 Cost of Goods Sold 600...

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

Solutions

Expert Solution


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

ekkarill92 answered 1 year ago

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