Question

The total annual sales for Nana's Nursery was $515,310 and the total accounts receivable was $27,156. What was the average collection porlod to the noarost whole day?17 days19 days21 days23 daysNone of these choices are correct.

Answer 1

Let's begin by listing out the given information:

Total annual sale = $515,310

Total accounts receivable = $27,156

The average collection period is obtained as shown below:

$\begin{gathered} AverageCollectionPeriod=\frac{TotalAnnualSale}{TotalAccountsReceivable} \\ AverageCollectionPeriod=\frac{515,310}{27,156}=18.98\approx19 \\ AverageCollectionPeriod=19 \end{gathered}$