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the average collection period (based on a365-day year) and the year-end receivables are, respectively:
365 days and $108,000.
73 days and $120,000.
73 days and $108,000.
81 days and $108,000.
73 days and $108,000 is the correct answer.
CORRECT ANSWER IS73 days &120000
The answer is73 days and $108,000 respectively.
5 = (600,000 @90%) / Avg A/cs Receivable
Avg A/cs Receivable =540,000 /5
So, Avg Receivables =108,000
And Average Collection Period is
=108,000 /540,000 *365
=73 Days
73 days and $108,000 Respectively.
>>>>>>>>>.. the answer will be73 days and $108,000.
73 days and $108,000>><<<>><<>>
73 days and108000>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RTD =365 days/5 =73days
(.9)$600,000 = $540.000 in credit sales
RT =5 = $540,000 / Receivables
Therefore , Receivables = $540,000 /5 = $108,000
Correct answer is = 73 days and $108,000.
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