Answer (B) is correct . The average collection period is calculated by dividing 360 days by the accounts receivables turnover of 8.0 {$300,000 ¡Â [($45,000 + 30,000) ¡Â 2]}. Thus,Answer (A) is incorrect because Using a turnover of 10.0, a rate based on beginning receivables, results in 36 days.
Answer (C) is incorrect because A period of 54 days requires a turnover of 6.7, a rate based on ending receivables.
Answer (D) is incorrect because A period of 61 days requires a turnover of 5.9, a rate based using cost of sales in the numerator.
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Assume net credit sales and cost of goods sold for Year 2 were $300,000 and $220,000, respectively. Lisa, Inc.’s average collection period for Year 2, using a 360-day year, was
