The financial statements of the Belfry Manufacturing Company reports net sales of $600,000 and accounts receivable of $80,000 and $40,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days?
A)24.3 times
B)73.0 times
C)36.5 times
D)48.7 times

Question

Quizplus · Accepted Answer

Average collection period = (Accounts receivable / Net sales) x Number of days in the year
= [(80,000 + 40,000) / 2 / 600,000] x 365
= (60,000 / 600,000) x 365
= 36.5 days. 
Therefore, the answer is C.

The Financial Statements of the Belfry Manufacturing Company Reports Net