Question

Oral roberts dental supplies has annual sales of $5,200,000. ninety percent are on credit. the firm has $559,000 in accounts receivable. compute the value of the average collection period. (do not round intermediate calculations. use a 360-day year.)

Answer 1

If this is talking about the percentage rate of the value received at that specific period, then it can be calculated as;

1. First, get the percentage equivalent of the value that’s currently on account receivable of this period. So, $559,000 divided by $5,200,000 equals to 0.1075.
2. Next, 0.1075 is multiplied to 100 to get the percentage. That gives us a rate of 10.75%.

Therefore, the percentage value of this collection 10.75%.

Answer 2

43 DAYS

Step-by-step explanation:

Average collection period = Account Receivables/ Credit Sales X Numbers of Days in a year.

$559000/ ($5200000 X 90%) X 360

= 43 Days