During the year Snedicker reported net sales of $1,920,000.The company had accounts receivable of $150.000,000 at the beginning of the year and $240,000 at the end of the year Compute Snedicker's average collection period assume 365 days a year. )
A)28.5 days
B)45.7 days.
C)37.1days.
D)74.2 days.

Question

Quizplus · Accepted Answer

Average Collection Period = (Accounts Receivable / Net Sales) x Number of Days
= [(Beginning Accounts Receivable + Ending Accounts Receivable) / 2 / Net Sales] x 365
= [(150,000 + 240,000) / 2 / 1,920,000] x 365
= 190,000 / 1,920,000 x 365 / 2
= 0.09895833 x 182.5
= 18.03819479
≈ 37.1 days

Therefore, the best choice is C) 37.1 days.

During the Year Snedicker Reported Net Sales of $1,920,000