Granger Corporation had $185,000 in sales on account last year. The beginning ac
ID: 2588647 • Letter: G
Question
Granger Corporation had $185,000 in sales on account last year. The beginning accounts receivable balance was $16,000 and the ending accounts receivable balance was $25,000. The corporation's average collection period was closest to: (Assume 365 days a year. Round your intermediate answers to 2 decimal places.)
31.6 days
49.3 days
9.0 days
40.5 days
Granger Corporation had $185,000 in sales on account last year. The beginning accounts receivable balance was $16,000 and the ending accounts receivable balance was $25,000. The corporation's average collection period was closest to: (Assume 365 days a year. Round your intermediate answers to 2 decimal places.)
Explanation / Answer
Average AR=(Beginning AR+Ending AR)/2
=(16000+25000)/2=$20500
Hence average collection period=(Average AR/Sales)*365 days
=(20500/185000)*365 days
which is equal to
=40.5 days(Approx)(D)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.