Question

Marie's Clothing Store had an accounts receivable balance of $470,000 at the beginning of the year and a year-end balance of $580,000. Net credit sales for the year totaled $3,400,000. The average collection period of the receivables was: (Round any intermediary calculations to two decimal places and your final answer to the nearest day.)

A. 6 days.

B.62 days.

C.56 days.

D.50 days.

Answer 1

C. 56 Days

Accounts Receivable Turnover = Accounts Receivable Turnover = Net Credit Sales Average Accounts Receivable $ 34,00,000 ($470,000 + $580,000)/2 $ 34,00,000 $ 5,25,000 6.476190476 Accounts Receivable Turnover = Accounts Receivable Turnover = Average Collection Period = Average Collection Period = 365 Days Accounts Receivable Turnover 365 Days 6.476190476 56 Days Average Collection Period =