A. This answer is incorrect. See the correct answer for a complete explanation.
B. This answer is incorrect. See the correct answer for a complete explanation.
C. This answer is incorrect. See the correct answer for a complete explanation.
D. 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.
