The financial statements of Danielle Manufacturing Company report net sales of $750,000 and accounts receivable of $60,000 and $90,000 at the beginning and end of the year, respectively. What is the average collection period for accounts receivable in days?

Question

Quizplus · Accepted Answer

Average collection period = (Accounts Receivable / Net Sales) x 365 days
= ((60,000 + 90,000) / 2) / 750,000 x 365
= 75,000 / 750,000 x 365
= 36.5 days. 
Therefore, the best choice is B.

The Financial Statements of Danielle Manufacturing Company Report Net Sales