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    mstillylace's Avatar
    mstillylace Posts: 13, Reputation: 1
    New Member
    		  
    #1

    Jun 25, 2008, 08:40 AM
    Value of its credit sales?
    Is this correct...

    Mervyn’s Fine Fashions has an average collection period of 40 days. The accounts receivable balance is $80,000. What is the value of its credit sales?

    Ave collection period = AR/Ave Daily Sales
    40 = 80,000/Ave daily sales
    Ave daily sales = 80,000/40 = $2,000
    So yearly sales = $2,000 x 365 = $730,000
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
    		  
    #2

    Jun 29, 2008, 04:34 PM
    Yes, it's correct.
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