Compute Serial Corp.’s accounts receivable turnover ratio for the year ended May 31, 2015. Assume that all sales are on credit. Round your answer to two decimal places. fill in the blank 1 times 2. What is the average collection period in days for an account receivable. (assuming 360 in a year) Round the final answer to the nearest number
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Accounts Receivable Turnover for Serial Corp.
The 2015 annual report of Serial Corp. (the maker of Yumm-o's and Whee-tos) reported the following amounts (in millions of dollars):
| Revenues, for the year ended May 31, 2015 | $15,770 |
| Accounts receivable, net, May 31, 2015 | 953 |
| Accounts receivable, net, May 31, 2014 | 1,082 |
Required:
1. Compute Serial Corp.’s accounts receivable turnover ratio for the year ended May 31, 2015. Assume that all sales are on credit. Round your answer to two decimal places.
fill in the blank 1 times
2. What is the average collection period in days for an account receivable. (assuming 360 in a year) Round the final answer to the nearest number.
fill in the blank 2 days
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