At the end of the third year,the Treadwell Tire Company had accounts receivable of $66,600,and at the end of the fourth year,the company had accounts receivable of $72,600.If the company's net sales revenue during the fourth year were $876,000,the days to collect during year four was (Round all calculations to one decimal place. ):
A)12.6
B)29.0
C)8.0
D)34.0

Question

Quizplus · Accepted Answer

To find the days to collect during the fourth year, we need to use the following formula:

Days to collect = (Accounts receivable / Net sales revenue) x Number of days in the year

Number of days in the year = 365

Accounts receivable at the end of the third year = $66,600 
Accounts receivable at the end of the fourth year = $72,600

Change in accounts receivable = $72,600 - $66,600 = $6,000

Net sales revenue during the fourth year = $876,000

Days to collect = ($72,600 / $876,000) x 365 = 29.0 days

Therefore, the best choice is B, with an explanation that the formula used to find the days to collect during the fourth year was (Accounts receivable / Net sales revenue) x Number of days in the year, and the calculation yielded a result of 29.0 days.

At the End of the Third Year,the Treadwell Tire Company