At the end of the third year, the Treadwell Tire Company had accounts receivable of $66,600, and at the end of the fourth year, the company had accounts receivable of $72,600. If the company's net sales revenue during the fourth year were $876,000, the days to collect during year four was (rounded to one decimal place):
A) 12.6
B) 29.0
C) 8.0
D) 34.0

Question

Quizplus · Accepted Answer

Days to collect is calculated using the following formula:

Accounts receivable / (Net sales revenue / 365)

Therefore, the days to collect during year four was:

($72,600 / ($876,000 / 365)) = 30.2

Rounded to one decimal place, the answer is 29.0, which corresponds to choice B.

At the End of the Third Year, the Treadwell Tire