Question

Last year, Nikkola Company had net sales of $2,299,500,000 and cost of goods sold of $1,755,000,000. Nikkola had the following balances: January 1 December 31 Accounts receivable $142,650,000 $172,350,000 Inventory 54,374,200 62,625,800 Required: Note: Round answers to one decimal place. Assume 365 days per year. 1. Calculate the average accounts receivable.

Answer 1

Answer:

Average receivables = $157,500,000

Explanation:

Account receivable represent the amount of credit made by a business which remain uncollected as at the reporting date. In other words, they represent the amount that customers are owing the business in respect of credit sales.

Average account receivables

=(opening balance + closing balance)/2

=( $142,650,000 + $172,350,000)/2

= 157,500,000.