Miranda Tool Company sells to retail hardware stores on credit terms of net 30. Annual credit sales

Question:

Miranda Tool Company sells to retail hardware stores on credit terms of “net 30.” Annual credit sales are $18 million and are spread evenly throughout the year. The company’s variable cost ratio is 0.70, and its average $1.9 million. Using this information, determine the following for the company:
a. Average daily credit sales
b. Average collection period
c. Average investment in receivables

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...