QUESTION 15 The average collection period is 24 days. If the firm has accounts receivable totaling...

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Answer 1

Answer #1

Answer :$3.331 million

Explanation

Account Receivable Turnover ratio = Net Annual Credit sale / Averagr Gross Account Receivable

Day Sales in Receivables = 365 / Receivable turnover ratio

24 = 365 / Receivable turnover ratio

Receivable turnover ratio = 365 / 24 = 15.21

Account Receivable Turnover ratio = Net Annual Credit sale / Averagr Gross Account Receivable

Net Annual Credit sale = Account Receivable Turnover ratio * Averagr Gross Account Receivable

= 15.21 * 219000

= 3330990 or approximate 3.331 million

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Answer 2

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