Dieringer Corporation's most recent balance sheet and income statement appear below:
-The average collection period for Year 2 is closest to:
A)1.1 days
B)0.9 days
C)41.8 days
D)44.6 days

Question

Dieringer Corporation's most recent balance sheet and income statement appear below:  
-The average collection period for Year 2 is closest to:
A)1.1 days 
B)0.9 days 
C)41.8 days 
D)44.6 days

Quizplus · Accepted Answer

Accounts receivable turnover = Sales on account F1F1F1S1F1F1F10 Average accounts receivable balance
= $1,310 F1F1F1S1F1F1F10 $150* = 8.73
*Average accounts receivable balance = ($160 + $140)F1F1F1S1F1F1F10 2 = $150
Average collection period = 365 days F1F1F1S1F1F1F10 Accounts receivable turnover
= 365 days F1F1F1S1F1F1F10 8.73 = 41.8 days

Dieringer Corporation's Most Recent Balance Sheet and Income Statement Appear