Box Company Reported the Following Data at the End of 20X2

question 66

Multiple Choice

Box Company reported the following data at the end of 20X2: $$\begin{array} { | l | r | } \hline \text { Sales revenue (75\% on credit) } & \$ 300,000 \\\hline \text { Expenses } & 60,000 \\\hline \begin{array} { l } \text { Trade receivables, net at December 31, 19B (a decrease of } \\\$ 4,000 \text { during 19B) }\end{array} & 8,000 \\\hline \text { Total assets } & 200,000 \\\hline \text { Shareholders' equity } & 150,000 \\\hline \text { Assume a 365-day year } & \\\hline\end{array}$$ What was the average number of days to collect receivables during 20X2?

• A) 14.3
• B) 16.2
• C) 21.9
• D) 36.5

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Definitions:

Useful Life

The expected period of time during which an asset remains useful to the owner or is capable of generating revenue.

Interest Rate

The percentage of a sum of money charged for its use, reflecting the cost of credit or the return on investment.

Rule of 70

A simple way to estimate the number of years it will take for an investment to double in size, calculated by dividing 70 by the annual rate of growth.

Interest

The cost of borrowing money, expressed as a percentage, paid by the borrower to the lender for the use of the lender's money.