If net sales for the year is rs 2,50,000 and debtors rs 50000 ,then average Collection period will be
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Answered by
2
Answer:
The average collection period is 73 days
Step-by-step explanation:
In context to the given question we have to find the value of average collection period.
Given:
Net Sales = RS. 2,50,000
Debtors = RS. 50,000 ( Receivable balance)
Solution:
We know that
Applying the formula for collection period = [Accounts Receivable Balance / Net sales ] x 365
Substituting the known values -
Applying the formula for collection period = [Accounts Receivable Balance / Net sales ] x 365 =
⇒ [50,000 / 2,50,000] x 365
= [1/5] x 365
= 365/5
= 73 days
The average collection period is 73 days.
Answered by
0
Answer:calculate average collection period: Net Sales Rs 2,50,000, Average Debtors Rs 50,000.
Explanation:
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