Granger Corporation had $187,000 in sales on account last year. The beginning ac
ID: 2588656 • Letter: G
Question
Granger Corporation had $187,000 in sales on account last year. The beginning accounts receivable balance was $19,000 and the ending accounts receivable balance was $29,000. The corporation's average collection period was closest to: (Assume 365 days a year. Round your intermediate answers to 2 decimal places.)
46.9 days
37.1 days
56.6 days
7.8 days
Granger Corporation had $187,000 in sales on account last year. The beginning accounts receivable balance was $19,000 and the ending accounts receivable balance was $29,000. The corporation's average collection period was closest to: (Assume 365 days a year. Round your intermediate answers to 2 decimal places.)
Explanation / Answer
Average AR=(Beginning AR+Ending AR)/2
=(19000+29000)/2=$24000
Hence average collection period=(Average AR/Sales)*365 days
=(24000/187000)*365 days
which is equal to
=46.9 days(Approx)(A).
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