Consider the Following Information Assuming a 365-Day Year,determine the Days to Collect Accounts Receivable

question 23

Multiple Choice

Consider the following information: $\begin{array}{ll}\text { Cash sales } & \$ 59,000 \\\text { Credit sales } & 510,000 \\\text { Beginning Cash } & 18,000 \\\text { Ending Cash } & 11,500 \\\text { Beginning Retained Earnings } & 32,300 \\\text { Ending Retained Earnings } & 41,700 \\\text { Beginning Accounts Receivable } & 40,000 \\\text { Ending Accounts Receivable } & 50,000 \\\text { Net Income } & 64,000\end{array}$
Assuming a 365-day year,determine the days to collect accounts receivable.

• A)304.2 days
• B)125.0 days
• C)31.9 days
• D)32.22 days
• E)28.4 days

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Definitions:

Monthly Rate

A set interest or cost expressed as a monthly percentage or fee.

Loan Payment Schedule

A detailed plan listing individual payment amounts and dates throughout the term of a loan, showing both principal and interest components.

Amortized Loan

a loan in which the principal and interest are paid down over time through fixed monthly payments.

Effective Rate

The effective rate, often referred to as the effective annual rate, is the interest rate on a loan or financial product re-compounded on a yearly basis.