Question

Blue Spruce Corp. had accounts receivable of $240,000 on January 1, 2019. The only transactions that affected accounts receivable during 2019 were net credit sales of $2,650,000, cash collections of $2,550,000, and accounts written off of $50,000. Compute the ending balance of accounts receivable. Ending balance of accounts receivable $ LINK TO TEXT Compute the accounts receivable turnover for 2019. (Round answer to 0 decimal places, e.g. 25.) Accounts receivable turnover LINK TO TEXT Compute the average collection period in days. (Round answer to 1 decimal place, e.g. 2.5. Use 365 days for calculations.) Average collection period days

Answer 1

Accounts receivable beginning= $240,000

Net credit sales =$2,650,000

Cash collection=$2,550,000

Accounts receivable written off = $50,000

Accounts receivable ending= account receivable beginning + Net credit sales- Cash collection - Accounts receivable written off

=240,000+2,650,000-2,550,000-50000

= $290,000

Average accounts receivables = ( Accounts receivables beginning + accounts receivables ending)/2

= (240,000+290,000)/2

= $265,000

Accounts receivable turnover = Net credit sales/ Average accounts receivables

= 2,650,000/265000

= 10

Average collection period = 365/Accounts receivables turnover

= 365/10

= 36.5 days

Thanks.