Question

The Perry Company reported Accounts Receivable, Net of $66,000 at the beginning of the year and $72,900 at the end of the year. If the company's net sales revenue during the fourth year was $882,000, what are the days to collect during year? (Round all calculations to 1 decimal place.)
a. 8.3
b. 30.2
c. 12.1
d. 28.7

Answer 1

Answer:

d. 28.7

Explanation:

Calculation to determine the days to collect during year

Using this formula

Average collection period=Average accounts receivables/Net sales*365

Where,

Average accounts receivables=$66,000+$72,900/2

Average accounts receivables=$69,450

Let plug in the formula

Collection period =$69,450/$882,000*365

Collection period=28.7 days

Therefore the days to collect during year is 28.7days