Question

The financial statements of winery Andrew Peller Limited reported net sales of $342,606 thousand for its year ended March 31, 2017. Accounts receivable were $26,973 thousand at March 31, 2017, and $28,223 thousand at March 31, 2016.

Calculate the company’s accounts receivable turnover ratio and the average collection period for accounts receivable in days. (Round answers to 2 decimal places, e.g. 15.25. Use 365 days for calculation.)

Accounts receivable turnover ratio		enter Accounts receivable turnover ratio in times	times
Average collection period for accounts receivable in days		enter a number of days	days

Answer 1

average receivables = (opening debtors + closing debtors) / 2

= (26973+28223) /2

= 27598

Accounts receivable turnover ratio = net sales / average receivables

= 342606 / 27598

  = 12.4141 times

average collection period for accounts receivable in days = 365 days / Accounts receivable turnover ratio

= 365 days / 12.4141

= 29.4020 days

= 29 days approx.

Thank you....