Rhodes Company reports the following information for the Year 1 fiscal year:

Determine the average number of days it takes Rhodes to collect its accounts receivable.(Round intermediate calculations to 2 decimal places.)

Question

Rhodes Company reports the following information for the Year 1 fiscal year:

Determine the average number of days it takes Rhodes to collect its accounts receivable.(Round intermediate calculations to 2 decimal places.)

Quizplus · Accepted Answer

Accounts receivable turnover ratio = Sales of $650,000 ÷ Net accounts receivable of ($70,000 ? $4,000) = 9.85
Average number of days to collect accounts receivable = 365 ÷ Accounts receivable turnover ratio of 9.85 = 37 days

Rhodes Company Reports the Following Information for the Year 1