Galambos Corporation had an average receivables collection period of 19 days in 2003. Galambos has stated that it wants to decrease its collection period in 2004 to match the industry average of 15 days. Credit sales in 2003 were $300 million, and analysts expect credit sales to increase to $400 million in 2004. To achieve the company's goal of decreasing the collection period, the change in the average accounts receivable balance from 2003 to 2004 that must occur is closest to: A. -$420,000 B. $420,000 C. $836,000
Galambos Corporation had an average receivables collection period of 19 days in 2003. Galambos has stated that it wants to decrease its collection period in 2004 to match the industry average of 15 days. Credit sales in 2003 were $300 million, and analysts expect credit sales to increase to $400 million in 2004. To achieve the company's goal of decreasing the collection period, the change in the average accounts receivable balance from 2003 to 2004 that must occur is closest to: A. -$420,000 B. $420,000 C. $836,000
Chapter17: The Management Of Cash And Marketable Securities
Section: Chapter Questions
Problem 2P
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General Accounting

Transcribed Image Text:Galambos Corporation had an average receivables collection period of 19
days in 2003. Galambos has stated that it wants to decrease its collection
period in 2004 to match the industry average of 15 days. Credit sales in
2003 were $300 million, and analysts expect credit sales to increase to
$400 million in 2004. To achieve the company's goal of decreasing the
collection period, the change in the average accounts receivable balance
from 2003 to 2004 that must occur is closest to:
A. -$420,000
B. $420,000
C. $836,000
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