Selected financial data for Bragg Company appear below:
-Suppose that 45% of Bragg Company's total sales are cash sales.The company's average collection period (age of receivables)for Year 2 was closest to:
A)44.24 days
B)54.07 days
C)36.05 days
D)29.49 days

Question

Selected financial data for Bragg Company appear below: 
-Suppose that 45% of Bragg Company's total sales are cash sales.The company's average collection period (age of receivables)for Year 2 was closest to:
A)44.24 days 
B)54.07 days 
C)36.05 days 
D)29.49 days

Quizplus · Accepted Answer

Sales on account = 55% F1F1F1S1F1F1F10 $180,000 = $99,000
Average accounts receivable balance = ($8,000 + $16,000)F1F1F1S1F1F1F10 2 = $12,000
Accounts receivable turnover = Sales on account F1F1F1S1F1F1F10 Average accounts receivable balance
= $99,000 F1F1F1S1F1F1F10 $12,000 = 8.25
Average collection period = 365 days F1F1F1S1F1F1F10 Accounts receivable turnover
= 365 days F1F1F1S1F1F1F10 8.25 = 44.24 days

Selected Financial Data for Bragg Company Appear Below