ABC Co. has an average collection period of 60 days. Total credit sales for the year were $3,285,000. What is the balance in accounts receivable at year-end?

Question

Quizplus · Accepted Answer

First, we need to calculate the average daily credit sales by dividing the total credit sales by 365 days:

$3,285,000 / 365 = $9,000

Then, we can use the average collection period to calculate the balance in accounts receivable:

60 days x $9,000 = $540,000

Therefore, the balance in accounts receivable at year-end is $540,000, which is answer choice C.

ABC Co Has an Average Collection Period of 60 Days