Asked by David Mckay on Jun 11, 2024
Verified
Data from Dalpiaz Corporation's most recent balance sheet and income statement appear below:
Required:Compute the average collection period for this year:
Average Collection Period
calculates the average number of days it takes for a business to receive payments from its customers for invoices issued.
- Analyze an enterprise's efficacy by reviewing its turnover and operational indicators.
Verified Answer
KI
Krystal IzquierdoJun 15, 2024
Final Answer :
Average collection period = 365 days ÷ Accounts receivable turnover*= 365 days ÷ 5.94 = 61.4 days*Accounts receivable turnover = Sales on account ÷ Average accounts receivable balance**= $647,000 ÷ $109,000 = 5.94 **Average accounts receivable= ($104,000 + $114,000) ÷ 2 = $109,000
Learning Objectives
- Analyze an enterprise's efficacy by reviewing its turnover and operational indicators.
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