Luna Company reported the following figur Net Credit Sales Account receivables at end of year

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Luna Company reported the following figures:
2020
2019
Net Credit Sales
Account receivables at end of year
$572,000
$38,700
$600,000
$46,100
Required:
1) Compute Luna's collection period of receivables for 2020. (Round to the nearest day)
2) Suppose Luna's normal credit terms for a sale on account are "2/10, n/30". How well
does Luna's collection period compare to the company's credit terms? Is this good or bad
for Luna Company?
Transcribed Image Text:Luna Company reported the following figures: 2020 2019 Net Credit Sales Account receivables at end of year $572,000 $38,700 $600,000 $46,100 Required: 1) Compute Luna's collection period of receivables for 2020. (Round to the nearest day) 2) Suppose Luna's normal credit terms for a sale on account are "2/10, n/30". How well does Luna's collection period compare to the company's credit terms? Is this good or bad for Luna Company?
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