Question

The total annual sales for Nana's Nursery was $515,310 and the total accounts receivable was $27,156. What was the average collection porlod to the noarost whole day?17 days19 days21 days23 daysNone of these choices are correct.

Answer 1

Let's begin by listing out the given information:

Total annual sale = $515,310

Total accounts receivable = $27,156

The average collection period is obtained as shown below:

`\begin{gathered} AverageCollectionPeriod=(TotalAnnualSale)/(TotalAccountsReceivable) \\ AverageCollectionPeriod=(515,310)/(27,156)=18.98\approx19 \\ AverageCollectionPeriod=19 \end{gathered}`