BiltRite, Inc. has sales of $610,000. The cost of goods sold is equal to 70% of sales. The beginning accounts receivable balance is $21,000 and the ending accounts receivable balance is $25,000.
How long on average does it take the ﬁrm to collect its receivables?

Question

Quizplus · Accepted Answer

The average collection period is calculated as (Ending accounts receivable + Beginning accounts receivable) / (Sales / 365 days).Plugging in the given values, we get:Average collection period = ($25,000 + $21,000) / ($610,000 / 365 days) = 13.76 days.