Question

Silver Eyes, Inc., has an average collection period of 23.63 days and its average daily accounts...

Silver Eyes, Inc., has an average collection period of 23.63 days and its average daily accounts receivable is $357,000. What are the company's annual credit sales assuming 365 days per year? Multiple Choice $8,435,910.00 $7,434,681.62 $6,127,098.32 $6,433,453.24 $5,514,388.49

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Answer #1

The Correct Answer is $5,514,388.49.

Average Collection Period = (Average Accounts Receivable / Net Credit Sales) * 365 days

Average Collection Period = 23.63 days

Average Accounts Receivable = $357,000

23.63 = ($357,000 / Net Credit Sales) * 365

23.63 * Net Credit Sales = $357,000 * 365

Net Credit Sales = ($357,000 * 365) / 23.63

Net Credit Sales = $130,305,000 / 23.63

Net Credit Sales = $5,514,388.4892

Rounding to two decimal places

Net Credit Sales = $5,514,388.49

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