Question

The Perry Company reported Accounts Receivable, Net of $62,800 at the beginning of the year and $74,500 at the end of the year. If the company's net sales revenue during the fourth year was $914,000, what are the days to collect during year

Answer 1

Answer: 27.14 days

Step-by-step explanation:

To calculate the Days to Collect during the the Year we will use the following formula,

= Average Accounts Receivables * 365/Sales

This is assuming a 365 year.

Average Accounts Receivables is calculated as

= Ending Receivables + Begining Receivables / 2

= 74,500 + 62,800 / 2

= $68,650 is the Average Inventory

Plugging in the figures then we have,

= 68,650 * 365/914,000

= 27.4149343545

= 27.14 days.

27.14 days to collect during the year.