Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?

Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?

A. 5 days
B. 36 days
C. 48 days
D. 73 days

The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
use the following formula:

(Average Receivables/Net Sales)*365

150,000/750,000*365 = 73 days

_________________________________________________

Net sales=750,000
A/C receivables= 150,000
days in a year =365

Collection period= (A/C Receivables/ net sales)*days in a year
= (150,000/750,000)*365= 73 days

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15 Comments to “Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?”

abdul raaque says:

18/07/2019 at 7:33 PM

pleas send me solution

Reply
1. Maham Fatima says:
  
  04/08/2019 at 6:57 PM
  
  The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
  150,000^750,000*365=73 days
  
  Reply
  1. admin says:
    
    28/11/2019 at 4:01 PM
    
    Thanks dear Maham for explaining
    
    Reply
2. Shumaila Aslam says:
  
  05/08/2019 at 3:46 PM
  
  Average Collection Period= (A/c Receivable/Net credit sales)*365
  =(150000/750000)*365
  =73 days
  
  Reply
3. fatima shahid says:
  
  19/10/2019 at 1:11 PM
  
  (150,000 divided by 750,000) x 356 days
  
  Reply
Sadaf says:

28/09/2019 at 4:23 PM

How it comes ??

Reply
Sohail says:

06/10/2019 at 2:40 PM

The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
use the following formula:

(Average Receivables/Net Sales)*365

150,000/750,000*365 = 73

Reply
1. admin says:
  
  28/11/2019 at 4:01 PM
  
  thanks
  
  Reply
Sabar Hussain says:

10/10/2019 at 3:51 PM

Account Receivable Turn over Ratio= Net Credit Sales/Average Debtors
750000/150000=5
Average Collection Period= No of days in Year/A.R. Turnover Ratio
365/5=73 days

Reply
waseem says:

17/10/2019 at 11:40 AM

net sales=750,000
A/C receivables= 150,000
days in a year =365

Collection period= (A/C Receivables/ net sales)*days in a year
= (150,000/750,000)*365

Reply
Sohail says:

18/10/2019 at 11:26 AM

The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.

150,000/750,000*365=73

Reply
Hina says:

19/10/2019 at 11:20 AM

Average receiveable/ net sale ×365 days

Reply
Muhammad Hannan says:

19/10/2019 at 11:42 PM

365/750000=…..
Then
And answer ko 150000 sy multiple krdo
Average collection period ajaye ga
Which is 73

Reply
Hamza says:

24/10/2019 at 11:21 PM

Receivables= 150000
Net sales= 750000
Average Collection?

Average Collection= Receivable /Net Sales * 365

Average Collection= 150000/750000*365=73 days

Reply
hafeezullah says:

28/11/2019 at 12:32 PM

Please send the formula to me

Reply

15 Comments to “Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?”

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