The carrying value of a firm's account receivable is $1,500,000 and the average collection period is 45 days. The firm's credit sales per day are:
A) $18,181.82.
B) $33,333.33.
C) $1,000,000.00.
D) $1,500,000.00.
E) None of these.

Question

Quizplus · Accepted Answer

To find out the daily credit sales of the company, we can use the formula:

Daily credit sales = (Accounts receivable / Average collection period)

Substituting the given values:

Daily credit sales = ($1,500,000 / 45) = $33,333.33

Therefore, the answer is choice B, $33,333.33.

The Carrying Value of a Firm's Account Receivable Is $1,500,000