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The average collection period is calculated as average accounts receivable divided by the average daily sales. Average receivables were $37,500 ($45,000 + $30,000 divided by 2) and the average sales were $833.33 ($300,000 divided by 360). Dividing $37,500 by $833.33 gives us 45 days of sales in receivables. This means that it takes an average of 45 days to collect receivables.
The average collection period is calculated as average accounts receivable divided by the average daily sales. This answer was calculated using 2010 year-end accounts receivable instead of the average accounts receivable during 2010.
The average collection period is calculated as average accounts receivable divided by the average daily sales. This answer was calculated using 2009 year-end accounts receivable instead of the average accounts receivable during 2010.
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Assume net credit sales were $300,000 for 2010. Lisa Inc.'s average collection period for 2010, using a 360-day year, was
