Entwhistle Ltd Entwhistle's Credit Terms Are Net 30 Days

question 7

Multiple Choice

Entwhistle Ltd.supplied the following information for the years-ended December 31, 2013 and 2014: $\begin{array}{lcc} \text { Current Assets: } & 2014 & 2013 \\\text { Cash } & \$ 15,000 & 16,750 \\\text { Accounts Receivable } & 247,500 & 299,000 \\\text { Inventory } & 275,000 & 166,250 \\\text { Prepaid expenses } & 4,000 & 4,000 \\\\\text { Current liabilities }&\$541,500&\$1,084,000\\\\\text { Net credit sales } & \$ 2,400,000 & \$ 2,255,000 \\\text { Purchases } & \$ 1,700,000 & \$ 1,590,000\end{array}$ Entwhistle's credit terms are net 30 days. On average, Entwhistle has been collecting its accounts receivable:

• A)within the 30 days required by its credit terms.
• B)after the 30 days has passed.
• C)within the discount period of 10 days.
• D)more information is needed to answer this question.

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