Question:
Camden Hardware’s credit sales for the year were $320,000. Accounts receivable at the beginning and
end of the year were $50,000 and $70,000, respectively. Calculate the accounts receivable turnover ratio
and the average collection period for the year.
Answer:
Receivables turnover = $320,000 = 5.33 times
$60,000*
($50,000 + $70,000) 2 = $60,000*
Average collection = 365 = 68 days
period 5.33
Camden Hardware’s credit sales for the year were $320,000. Accounts receivable at the beginning and
end of the year were $50,000 and $70,000, respectively. Calculate the accounts receivable turnover ratio
and the average collection period for the year.
Answer:
Receivables turnover = $320,000 = 5.33 times
$60,000*
($50,000 + $70,000) 2 = $60,000*
Average collection = 365 = 68 days
period 5.33
