Financial statements for Marcell Company appear below:
-Marcell Company's average collection period for Year 2 was closest to:
A)22.6 days
B)15.7 days
C)25.8 days
D)36.9 days

Question

Financial statements for Marcell Company appear below:  
-Marcell Company's average collection period for Year 2 was closest to:
A)22.6 days 
B)15.7 days 
C)25.8 days 
D)36.9 days

Quizplus · Accepted Answer

Accounts receivable turnover = Sales on account F1F1F1S1F1F1F10 Average accounts receivable balance
= $2,550 F1F1F1S1F1F1F10 $110* = 23.2
*Average accounts receivable balance = ($110 + $110)F1F1F1S1F1F1F10 2 = $110
Average collection period = 365 days F1F1F1S1F1F1F10 Accounts receivable turnover (see above)
= 365 days F1F1F1S1F1F1F10 23.2 = 15.7 days

Financial Statements for Marcell Company Appear Below