Question

The Big Box Store has annual credit sales of $3,268,200 and cost of goods sold of $2,428,600. The average accounts receivable balance is $39,400. How many days on average does it take the firm to collect its accounts receivable?

Answer 1

4.40 days

Step-by-step explanation:

Calculation for How many days on average does it take the firm to collect its accounts receivable

Days to collect account receivables = 365 days/($3,268,200/$39,400)

Days to collect account receivables=365days/$82.95

Days to collect account receivables= 4.40 days

Therefore the numbers of days on average it takes the firm to collect its accounts receivable is 4.40 days