Calculate the Average Collection Period for Dotte Inc

question 5

Multiple Choice

Calculate the average collection period for Dotte Inc.if its accounts receivables were $500 and $600 at the end of each of the last two years, and its revenue over the last year was $3,000.

• A)69 days
• B)68 days
• C)67 days
• D)66 days

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Definitions:

Delivery Truck

A vehicle specifically designed and used for transporting goods from one location to another.

Undepreciated Cost

The original cost of an asset minus any accumulated depreciation.

Market Strategy

An organization's plan that combines all of its marketing goals into a comprehensive plan, focusing on the ideal product mix to achieve maximum profit potential.

Straight-Line Method

A method of calculating depreciation or amortization by evenly dividing the asset’s cost over its useful life.