Using the Information Provided,what Is the Collection Cycle for the Firm

question 87

Multiple Choice

Using the information provided,what is the collection cycle for the firm? Allied Industries, Inc.
Selected Income Statement Items, 2017
$\begin{array}{ll}\text { Cash Sales } & \$ 1,500,000 \\\text { Credit Sales } & \$ 7,500,000 \\\text { Total Sales } & \$ 9,000,000 \\\text { COGS } & \$ 6,000,000\end{array}$
Allied Industries, Inc.
Selected Balance Sheet Accounts
$\begin{array}{llll}&12/31/2017 &12/31/2016&\text { Change }\\\text { Accounts Receivable } & \$ 270,000 & \$ 240,000 & \$ 30,000 \\\text { Inventory } & \$ 125,000 & \$ 100,000 & \$ 25,000 \\\text { Accounts Payable } & \$ 110,000 & \$ 90,000 & \$ 20,000\end{array}$

• A)6.84 days
• B)7.60 days
• C)10.34 days
• D)12.41 days

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