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How we can count the Average collection period ? IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred
How we can count the Average collection period ?
IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30, 2020: May April 10: Received an order from Peter's Appliances, a wholesaler, for 46 machines. April 30: Sold 69 machines to Yuri Inc. on credit. 1: The purchasing manager of Peter's Appliances visited IceKreme's factory and purchased 50 machines on credit, instead of the 46 machines that were previously ordered. May 5: Yuri Inc. paid for the machines purchased on April 30. May 7: Sold 20 machines to Cheng Ltd. on credit. May 10: Wrote off $12,000 of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April 1, 2020. May 15: Peter's Appliances returned two defective machines and paid the amount due. June 1: Received $128,000 from Cheng Ltd. on account. June 30: Recovered $4,200 from the receivables that were written off on May 10. Additional information is as follows: IceKreme sold all machines at $8,000 per unit. All of IceKreme's sales were on credit with terms 2/10, n/30. IceKreme's records included the following items and their balances as at March 31, 2020: Accounts receivable Allowance of doubtful accounts (credit balance) Net sales $ 84,000 20,600 840,000 View transaction list View journal entry worksheet Date General Journal Debit Credit No 2 April 30 552,000 Accounts receivable Sales revenue 552,000 3 May 01 400,000 Accounts receivable Sales revenue 400,000 4 May 05 Cash 540,960 11,040 Sales discounts Accounts receivable 552,000 5 5 May 07 160,000 Accounts receivable Sales revenue 160,000 6 May 10 12,000 Allowance for doubtful accounts Accounts receivable 12,000 7 May 15 Cash 384,000 16,000 Sales allowances and returns Accounts receivable 400,000 8 June 01 128,000 Cash Accounts receivable 128,000 9 June 30 4,200 Accounts receivable Allowance for doubtful accounts 4,200 10 June 30 Cash 4.200 3. IceKreme's net accounts receivable were $128,000 at June 30, 2019. Calculate IceKreme's average collection period for fiscal year 2020. (Use 365 days a year. Round intermediate calculations to 2 decimal places. Round the final answer to 1 decimal place.) Average collection period daysStep by Step Solution
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