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Oliveras Company had net credit sales during the year of $800,000 and cost of goods sold of $500,000. The balance in accounts receivable at the beginning of the year was $100,000, and the end of the year it was $150,000. What were the accounts receivable turnover and the average collection period in days?

Respuesta :

Samawati

Answer:

6.4 & 57 days

Explanation:

Average accounts receivable turnover ratio =net credit sales/average accounts receivable

For Oliveras company:

Net credit sales" $ 800,000.00

Average account accounts receivable = opening inventory + closing inventory /2

=($100,000 + $150,000)2=$ 125,000

Average receivable turnover= $800,000/$125,000

      =6.4

Average collection period = 365/ Average receivable turnover

      =365/ 6.4

      =57.03

      57 days

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