The following geographic data includes net product sales summarized on the basis

Question

The following geographic data includes net product sales summarized on the basis of the customer location and long-lived assets based on their location:
                                 2011             2010              2009  
Net product sales:                          
United states       $487,185       $471,714       $455,517  
Foreign                      41,184            45,435            40,075   
                              $528,369       $517,149       $495,592  
Long-lived assets:                          
United states       $170,173       $172,087       $176,044  
Foreign                     41,989           43,405             44,677  
                              $212,162       $215,492       $220,721  

Calculate the accounts receivable turnover and average collection period for 2011. (Use “Net Product Sales.” Assume all sales were credit sales.) (Round answers to 1 decimal place, e.g. 15.2.)

Accounts receivable turnover           times
Average collection period                  days

Explanation / Answer

Accounts receivable turnover:    Credit Sales/ Average acounts receivable

                                                528,369/ (212,162+215,492)/2

                                               528,369/ 213,827

                                               2.5 times

Average Collection period : 365/ Receivable turn over ratio

                                         365/2.471

                                         148 Days

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