Metlock, inc. had a balance in the accounts receivable account of $819000 at the beginning of the year and a balance of $914000 at the end of the year. net credit sales during the year amounted to $9098250. the average collection period of the receivables in terms of days was
a. 5 days.
b. 34.8 days.
c. 32.9 days.
d. 34 days.
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Ответ:
The average collection period of the receivables in terms of days was b. 34.8 days.
Explanation:
The average collection period of the receivables in terms of days = 365/Accounts receivable turnover ratio
The accounts receivable turnover is an efficiency ratio that measures how many times a company can collect its receivables or money owed by clients during the year.
Accounts receivable turnover is calculated by following formula:
Accounts Receivable Turnover ratio = Net Credit Sales /Average Accounts Receivable
In there:
Average Accounts Receivable = (The beginning accounts receivable of the year balance + The ending accounts receivable of the year balance)/2 = ($819,000 + $914,000)/2 = $866,500
Accounts Receivable Turnover = $9,098,250/$866,500 = 10.5 times
The average collection period of the receivables = 365/Accounts receivable turnover ratio = 365/10.5 = 34.8 days
Ответ:
$9,450 +
$2,680 +
$1,875 +
$930 =
14,935 - the $1,900 grant =
$13,035!!