The financial statements of Black Barn Company are given below. Refer to the financial statements of Black Barn Company.The firm's average collection period for 2009 is
A)59.31.
B)55.05.
C)61.31.
D)49.05.
E)None of the options

Question

The financial statements of Black Barn Company are given below.  Refer to the financial statements of Black Barn Company.The firm's average collection period for 2009 is
A)59.31. 
B)55.05. 
C)61.31. 
D)49.05. 
E)None of the options

Quizplus · Accepted Answer

AR turnover = $8,000,000/[($1,200,000 + $950,000)/2] = 7.44; ACP = 365/7.44 = 49.05 days.

The Financial Statements of Black Barn Company Are Given Below