Quick answer of this accounting questions Sunshine Catering has annual sales of $425,000. Theircost of goods sold is 52% of sales, and the profit marginis 6%. If the average accounts receivable balance is$56,000, how long does it take Sunshine Catering tocollect paymentforitsservices?

Step 1: Definition of Average Collection Period (ACP)The Average Collection Period (ACP) measures…

Answered: Sunshine Catering has annual sales of…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

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Sunshine Catering has annual sales of $425,000. Their cost of goods sold is 52% of sales, and the profit margin is 6%. If the average accounts receivable balance is $56,000, how long does it take Sunshine Catering to collect payment for its services?