The Ward Company has provided the following information:
Net sales totaled $750,000.
Beginning net accounts receivable was $65,000.
Ending net accounts receivable was $85,000.
What was Ward's average collection period?

Question

Quizplus · Accepted Answer

Receivable turnover ratio (10) = Net sales ($750,000) / Average net accounts receivable ($75,000*). *Average accounts receivable ($75,000) = [beginning net accounts receivable ($65,000) + ending net accounts receivable ($85,000)] / 2.Average collection period (36.5 days) = 365 / receivables turnover (10).

The Ward Company Has Provided the Following Information