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:
A)12.
B)29.
C)8.
D)34.

Question

Quizplus · Accepted Answer

Receivables Turnover = Net sales/Average net accounts receivable
$876,000/[($66,600 + $72,600)/2] = 12.6 (rounded)
Days to Collect = 365/receivables turnover
29 (rounded)= 365/12.6.

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