corn products, Corp. Ended the year 2008 with an average collection period of 42

Question

corn products, Corp. Ended the year 2008 with an average collection period of 42 days. The firm’s credit sales for 2008 or 9.2 million. What is the year in 2008 balance in Accounts Receivable for corn products? Consider a 365 days a year. Asset Management Ratlos Com Products Corp ended the year 2008 with an average collection period of 42 days. The frm's credit sales for 2008 were $9 2 million. What is the year end 2008 balance in accounts receivable for Corn Products? (Consider a 365 days o year) O s0 219 millorn O $386 4 million O $10586 milion O $4 5652 milion

Explanation / Answer

Receivables Collection Period (RCP) = Average Account Receivables/Sales per day

Given RCP = 42 days and annual sales = 9.2 million

sales per day = 9.2 million/365

by substituting values in the above formula,

42 = Average account receivables/(9.2 milliion/365)

Average Account Receivables = $1.0586 million

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