The Manana Corporation had sales of $81.3 million this year. Its accounts receivable balance averaged $3.3...
The Manana Corporation had sales of $81.3 million this year. Its accounts receivable balance averaged $3.3 million. How long, on average, does it take the firm to collect on its sales? (Hint: Use 365 days for a year.)
The collection period is ____days. (Round to one decimal place.)
Homework Answers
Collection Period = 365 / Account Receivable Turnover Ratio
and,
Account Receivable Turnover Ratio = Net Credit Sales / Average Account Receivable
= $ 81.3 million / $ 3.3 million
= 24.636
Therefore,
Collection Period = 365 / 24.636
= 14.8 days
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enter the accounts receivable turnover ratio in times rounded
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accounts receivable balance of $300,035. The table also shows how
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six months. The company had annual sales of $2.40 million and it
normally extends 30-day credit terms to its customers.
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