Granger Company Had $180,000 in Sales on Account Last Year

question 81

Multiple Choice

Granger Company had $180,000 in sales on account last year.The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $18,000.The company's average collection period (age of receivables) was closest to:

• A) 20.28 days.
• B) 28.39 days.
• C) 36.50 days.
• D) 56.78 days.

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Definitions:

Inventory Turnover

A ratio showing how many times a company sells and replaces its stock of goods within a certain period.

Common Stockholders' Equity

The portion of equity ownership in a corporation held by common stock investors, reflecting their claim on the company's assets.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.

Profit Margin

A financial ratio that measures the amount of net income earned with each dollar of sales by comparing profit to revenue.