Bilt Rite has sales of £610,000.The cost of goods sold is equal to 70% of sales.The beginning trade receivables balance is £21,000 and the ending trade receivables balance is £25,000.How long on average does it take the firm to collect its receivables?

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Quizplus · Accepted Answer

The average collection period is calculated as (Ending trade receivables + Beginning trade receivables) / Sales * 365 days.= (25,000 + 21,000) / 610,000 * 365 days= 46,000 / 610,000 * 365 days= 13.76 days

Bilt Rite Has Sales of £610,000