Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Chapter 3, Problem 18P
Summary Introduction
To calculate: The average collection period of the firm.
Introduction:
Average collection period:
It refers to the average number of days between the time period of credit sales and that of receiving payment from invoiced customers. It ensures that the company has sufficient cash in hand to meet its financial requirements.
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A firm has sales of $1.4 million, and 10 percent of the sales are for cash. The year-end accounts receivable balance is $205,000.
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What is the average collection period? (Use 365 days in a year. Do not round intermediate calculation. Round the final answer to the 1 decimal place.)
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Average collection period           days
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A firm has sales of $1.4 million, and 10 percent of the sales are for cash. The year-end accounts receivable balance is $205,000.
What is the average collection period? (Use a 360-day year. Do not round intermediate calculations. Round your final answer to
2 decimal places.)
Average collection period
days
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Your company had net sales of $100,000 over the past year. One quarter of the sales were credit
sales. During that time, average receivables were $5,000. The accounts receivable balance at the
end of the year was $5,000. What was the average collection period? What is the average age of
receivables (same answer!)? (Assume a 360-day year)
O 18 days
O 27 days
O 36 days
O 72 days
O 60 days
Chapter 3 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Ch. 3 - If we divide users of ratios into short-term...Ch. 3 - Explain how the Du Pont system of analysis breaks...Ch. 3 - If the accounts receivable turnover ratio is...Ch. 3 - Prob. 4DQCh. 3 - Is there any validity in rule-of-thumb ratios for...Ch. 3 - Why is trend analysis helpful in analyzing ratios?...Ch. 3 - Inflation can have significant effects on income...Ch. 3 - What effect will disinflation following a highly...Ch. 3 - Why might disinflation prove favorable to...Ch. 3 - Comparisons of income can be very difficult for...
Ch. 3 - Low Carb Diet Supplement Inc. has two divisions....Ch. 3 - Database Systems is considering expansion into a...Ch. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Dr. Zhivà€go Diagnostics Corp.’s income...Ch. 3 - The Haines Corp. shows the following financial...Ch. 3 - Easter Egg and Poultry Company has $2,000,000 in...Ch. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Baker Oats had an asset turnover of 1.6 times per...Ch. 3 - AllState Trucking Co. has the following ratios...Ch. 3 - Front Beam Lighting Company has the following...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Jerry Rice and Grain Stores has $4,780,000 in...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Jim Short’s Company makes clothing for schools....Ch. 3 - The balance sheet for Stud Clothiers is shown...Ch. 3 - The Lancaster Corporation’s income statement is...Ch. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 27PCh. 3 - Prob. 28PCh. 3 - The Global Products Corporation has three...Ch. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - Prob. 34PCh. 3 - The following information is from Harrelson...Ch. 3 - Using the financial statements for the Snider...Ch. 3 - Given the financial statements for Jones...Ch. 3 - Prob. 2WE
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