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melisa1 [442]
3 years ago
14

Twist Corp. has a current accounts receivable balance of $457,615. Credit sales for the year just ended were $2,940,600.a. What

is the company's receivables turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
b. What is the company's days' sales in receivables? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
c. How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Alexus [3.1K]3 years ago
4 0

Answer and Explanation:

The computations are as follows

a.  For company receivable turnover

As we know it is

= Credit Sales ÷ current account receivable balance

= $2,940,600 ÷ $457,615

= 6.43 times

b.

Now

company's days' sales in receivables is

= 365 ÷ Receivables turnover ratio

= 365  ÷ 6.43

= 56.77 days  

c.  Therefore the average collection period is the same as days sales in receivable i.e 56.77 days

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Answer:

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The cost of good sold = Cost per unit × Quantity sold

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The cost of sold = $30 × 300,000 =  $9,000,000

This can be confirmed as follows:

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opening inventory                                     80,000

Production(see note below)                    <u> 340,000</u>

Available or sale                                       420,000

Closing inventory                                    <u>(120,000)</u>

Units sold                                                 <u>300,000</u>        

Cost of units sold = 300,000 × $30 = $9,000,000

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