Bilt Rite has sales of $610,000 and cost of goods sold equal to 68 percent of sales.The beginning accounts receivable balance is $58,900 and the ending accounts receivable balance is $61,050.How long on average does it take the firm to collect its receivables?

Question

Quizplus · Accepted Answer

The correct answer is A.The average collection period is calculated as (Ending accounts receivable + Beginning accounts receivable) / 2 / (Sales / 365).In this case, the average collection period is ($61,050 + $58,900) / 2 / ($610,000 / 365) = 35.89 days.

Bilt Rite Has Sales of $610,000 and Cost of Goods