Nachito Company had accounts receivable of $100,000 on January 1, 2012. The only transactions that affected accounts receivable during 2012 were net credit sales of $1,000,000, cash collections of $900,000, and accounts written off of $30,000.
Instructions
(a) Compute the ending balance of accounts receivable.
(b) Compute the accounts receivable turnover ratio for 2012.
(c) Compute the average collection period in days.