Question

Aguilera Corp. has a current accounts receivable balance of $337,800. Credit sales for the year just ended were $4,644,750.

A. What is the company's receivables turnover?
B. What is the company's day's sales in receivables?
C. How long did it take on average for credit customers to pay off their accounts during the past year?

Answer 1

A. 13.75 times

B. 26.55

C. 26.55 days

Step-by-step explanation:

A. Receivable turnover = Credit sales / Average accounts receivables

= 4,644,750 / 337,800

= 13.75 times

B. Days sales in receivables

= 365 / receivables turnover

= 365 / 13.75

= 26.55

C. Average collection period

= 26.55 days