Question

Total sales 400000 cash sales 80000 sales return 28000 closing balance of debtors 30000 closing balance of bill receivable 8000 find the average collection period

Answer 1

net credit sales = total sales - cash sales - sales return 
                          =400000-80000-28000
                          =292000

average receivable = opening debtors +closing debtors /2
                                =(30000+8000)/2
                                 =19000


debtors turnover ratio = net credit sales / average receivables 
                                   = 292000/19000
debtors turnover ratio  =15.37

average collection period= 365/debtors turnover ratio
                                         =365/15.37
                                       
 
average collection period =23.74

Hope its useful ..!!