A manufacturing company had net sales of $200,000 over the past year. 60% of the sales were credit sales. During that time, average receivables were $12,000. What was the average collection period? (Assume a 360-day year). a) 18 days b) 27 days c) 36 days d) 45 days e) 60 days

A manufacturing company had net sales of $200,000 over the past year. 60% of the sales were credit sales. During that time, average receivables were $12,000. What was the average collection period? (Assume a 360-day year). a) 18 days b) 27 days c) 36 days d) 45 days e) 60 days

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 1P: Greene Sisters has a DSO of 20 days. The companys average daily sales are 20,000. What is the level...

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Question

What was the average collection period?

A manufacturing company had net sales
of $200,000 over the past year. 60% of the
sales were credit sales. During that time,
average receivables were $12,000.
What was the average collection period?
(Assume a 360-day year).
a) 18 days
b) 27 days
c) 36 days
d) 45 days
e) 60 days

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