Explain how to compute the average collection period and why it is a critical factor in creating
Question:
Exhibit 23-13
Transcribed Image Text:
NTI BUDGETED ACCOUNTS RECEIVABLE AND CASH COLLECTIONS FROM CUSTOMERS FOR 2011 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Beginning balance of Add: Sales on account from Total accounls receivable $150,000 $ 187,500 2,250,000 $2,437,500 562,500 3,000,000 $3,562,500 receivables sales budget (Exhibit 23-4) during the month from cuslomers: $225,000 600,000 S825,000 750,000 $900,000 Less total cash receipls Previous quarter. This quarter $225,000 $150,000 S 187,500 562,500 450,000 6750 562,500 71250 1687500 1.875,000 2250,000 2 812 500 Estimated ending balance in accounts recelvable S150,000 $187,500 $ 562,500 750,000
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The average collection period in days is determined by dividing the number of days per year 365 ...View the full answer
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Related Book For
Financial & Managerial Accounting
ISBN: 9780073526997
15th Edition
Authors: Jan Williams, Sue Haka, Mark Bettner, Joseph Carcello
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