Excerpts from Huckabee Company's December 31, 2018 and 2017, financial statements are presented below: $\begin{array}{lrr}&2018&2017\
\text { Accounts receivable } & \$ 80,000 & \$ 72,000 \
\text { Merchandise inventory } & 58,000 & 72,000 \
\text { Net sales } & 400,000 & 372,000 \
\text { Cost of goods sold } & 240,000 & 220,000
\end{array}$
- Huckabee's 2018 average collection period (rounded) is:

Question

Excerpts from Huckabee Company's December 31, 2018 and 2017, financial statements are presented below: $\begin{array}{lrr}&2018&2017\
\text { Accounts receivable } & \$ 80,000 & \$ 72,000 \
\text { Merchandise inventory } & 58,000 & 72,000 \
\text { Net sales } & 400,000 & 372,000 \
 \text { Cost of goods sold } & 240,000 & 220,000
\end{array}$
- Huckabee's 2018 average collection period (rounded) is:

Quizplus · Accepted Answer

$\frac{\$ 400,000}{(\$ 80,000+72,000) / 2}$ = 5.26
Average collection period = 365/5.26 = 69 days

Excerpts from Huckabee Company's December 31, 2018 and 2017, Financial