Pujols Lumber Yard has a current accounts receivable balance of $447,016. Credit sales for the year just ended were $4,950,605.

Pujols Lumber Yard has a current accounts receivable balance of $447,016. Credit sales for the year just ended were $4,950,605.

Requirement 1:

What is the receivables turnover? (Round your answer to 2 decimal places (e.g., 32.16).)

 

Receivables turnover

times

Requirement 2:

The days’ sales in receivables? (Round your answer to 2 decimal places (e.g., 32.16).)

 

Days’ sales in receivables

days

 

Requirement 3:

How long did it take on average for credit customers to pay off their accounts during the past year? (Round your answer to 2 decimal places (e.g., 32.16).)

 

Average collection period

days

 

Explanation:

1.

The receivables turnover for the company was:

 

Receivables turnover	=	Credit sales / Receivables
Receivables turnover	=	$4,950,605 / $447,016
Receivables turnover	=	11.07 times

2.

Using the receivables turnover, we can calculate the day’s sales in receivables as:

 

Days’ sales in receivables	=	365 days / Receivables turnover
Days’ sales in receivables	=	365 days / 11.07
Days’ sales in receivables	=	32.96 days

3.

The average collection period, which is the same as the day’s sales in receivables, was 32.96 days.