Grasse Company had $160,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $12,000.The company's average collection period was closest to:
A)25.09 days
B)22.81 days
C)50.19 days
D)27.38 days

Question

Quizplus · Accepted Answer

Average accounts receivable balance = ($10,000 + $12,000)F1F1F1S1F1F1F10 2 = $11,000
Accounts receivable turnover = Sales on account F1F1F1S1F1F1F10 Average accounts receivable balance
= $160,000 F1F1F1S1F1F1F10 $11,000 = 14.55
Average collection period = 365 days F1F1F1S1F1F1F10 Accounts receivable turnover
= 365 days F1F1F1S1F1F1F10 14.55 = 25.09 days

Grasse Company Had $160,000 in Sales on Account Last Year