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Excerpts from Dowling Company's December 31, 2021 and 2020,financial statements and key ratios are presented...

Excerpts from Dowling Company's December 31, 2021 and 2020, financial statements and key ratios are presented below (all numbers are in millions): 2021 2020 Accounts receivable (net) $ 21 $ 13 Net sales $ 125 $ 110 Cost of goods sold $ 70 $ 65 Net income $ 21 $ 16 Inventory turnover 5.70 Return on assets 11.50 % Equity multiplier 2.46 Dowling's 2021 average collection period is: (Round your answer to 2 decimal places.)

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Answer #1
Average accounts receivable = ( Beginning account receivable + Ending accounts receivable ) / 2 = ( 13000000 + 21000000 ) / 2 17000000
Average collection period = ( Average accounts receivable / Net sales ) * Days in a year = ( 17000000 / 125000000 ) * 365 49.64 days
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