The Following Balance Sheet Information Was Provided by Western Company

question 53

Multiple Choice

The following balance sheet information was provided by Western Company: $\begin{array}{lrr}\text { Assets } & \text { Year 2 } & \text { Year 1 } \\\text { Cash } & \$ 3,400 & \$ 2,900 \\\text { Accounts receivable } & \$ 22,000 & \$ 20,000 \\\text { Inventory } & \$ 38,000 & \$ 44,000\end{array}$ Assuming Year 2 net credit sales totaled $134,000, what was the company's average days to collect receivables? (Use 365 days in a year. Do not round your intermediate calculations.)

• A) 54.5 days
• B) 114.4 days
• C) 59.9 days
• D) 57.2 days

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Definitions:

Creditor

A creditor is an entity or person that lends money or extends credit to another party, known as the debtor.

Lien

A legal right or claim against a property as security for payment of a debt or obligation.

Foreclosure

The legal process by which a lender or creditor takes control of a property, evicts the homeowner, and sells the home after the homeowner fails to make full principal and interest payments on a loan.

Contractor

An individual or company hired to perform specific tasks or services, often related to construction or renovation, under a contract agreement.