Question

Twist Corp. has a current accounts receivable balance of $336,500. Credit sales for the year just ended were $4,899,440. a. What is the company's receivables turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) b. What is the company's days' sales in receivables? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) c. How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16).

Answer 1

Solution = Current Accounts Receivable = $336,500 Credit sales - $4,899,440 (9) Receivable Turnover Ratio = Credit sales Accounts Receivable a $4,899,440 $ 336,500 a 14.-56 6 No. of Days'sales in receivable = Accounts Receivable Credit sale -x days in year 365 = $336,500 $4,899,440 = $ 25.0686813 C Average time their accounts or $25.07 days for credit customer to pay off is average collection period.

Average collection nove Period = No. of days in period Accounts Receivable Turnover ratio = 365 days 14.56 = 25.0686813 09 25.07 days Copprox) It would for credit take on customer an average 25.07 days to pay off their debt.

Answer 2

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