Answer:
a. $210,000
b. 21.69 times
c. 16.83 average days to collect receivables
Explanation:
a. Ending balance of accounts receivable
= Beginning account receivable + Net credit sales - Cash collections
= $140,000 + $3,795,000 - $3,725,000
= $210,000
b. Account receivable turnover
= Net credit sales ÷ [(Beginning inventory + Ending inventory)/2]
= $3,795,000÷ [($140,000 + $210,000)/2]
= $3,795,000 ÷ $175,000
= 21.69 times
c. Average collection period in days
= Average account receivable ÷ [ Annual sales ÷ 365]
= $175,000 ÷ [$3,795,000 ÷ 365]
= $175,000 ÷ $10,397
= 16.83 average days to collect receivables
