Help Save & Exit S Twist Corp. has a current accounts receivable balance of $537
ID: 2809469 • Letter: H
Question
Help Save & Exit S Twist Corp. has a current accounts receivable balance of $537,810. Credit sales for the year just ended were $5,473,640. a. What is the recelvables turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) the past year? (Use 365 days a year. Do not round intermediate calculations and b. What is the days' sales in receivables? (Use 365 days a year. Do not round e. How long did it take on average for credit customers to pay off their accounts during round your answer to 2 decimal places,e.g.32.16.) a. Receivables turnover b. Days sales in receivables c. Average collection period times days daysExplanation / Answer
a. Receivables turnover ratio = Credit sales / Accounts receivables
Receivables turnover ratio = $5,473,640 / $537,810 = 10.18 times
b. Days' sales in receivables = Accounts receivables / (Credit sales / 365 days)
Days' sales in receivables = $537,810 / ($5,473,640 / 365 days) = 35.86 days
c. Average collection period = 1 / Receivables turnover ratio
Average collection period = 1 / 10.18 = 35.86 days
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