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Suman Rani

· started a discussion

· 1 Months ago

solution of187306.0 (Question: 187306.0 )

plz provide solution for the same as early as possible

Question:
Ninety-percent of X company's total sales of $600,000 is on credit. If its year-end receivables turnover is 5, the average collection period (based on a 365-day year) and the year-end receivables are, respectively:
Options:
A) 365 days and $108,000.
B) 73 days and $120,000
C) 73 days and $108,000.
D) 81 days and $108,000
E)

None of these

Solution:

Ans (c)


given total sales =600,000 cr sales percentage =90% RTO =5 Annual cr sales in days =365 REQUIRED ACP A/R Cr sales =600,000 *90% =540,000 Avg. cr. sales/day = annual cr. sales ÷365 =1479.45 A/R = Cr. sales ÷ RTO A/R =540,000/5 =108,000 ACP = A/R ÷ Avg. cr. sales per day ACP =108,000 ÷147945 =73 days 


Therefore, the correct answer for your question is choice C (73 days and $10800)

Knowledge Expert

· commented

· 1 Months ago

given total sales =600,000 cr sales percentage =90% RTO =5 Annual cr sales in days =365 REQUIRED ACP A/R Cr sales =600,000 *90% =540,000 Avg. cr. sales/day = annual cr. sales ÷365 =1479.45 A/R = Cr. sales ÷ RTO A/R =540,000/5 =108,000 ACP = A/R ÷ Avg. cr. sales per day ACP =108,000 ÷147945 =73 days

Therefore, the correct answer for your question is choice C (73 days and $10800)
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