Ask Question
12 May, 05:06

CornProducts Corp. ended the year 2018 with an average collection period of 40 days. The firm's credit sales for 2018 were $9 million. What is the approximate year-end 2018 balance in accounts receivable for Corn Products?

+5
Answers (1)
  1. 12 May, 05:26
    0
    The approximate year-end 2018 balance in accounts receivable for Corn Products is $986,300

    Explanation:

    For computing the year end balance of accounts receivable, we have to use the formula of average collection period which is shown below:

    Average collection period = 365 : average accounts receivable

    40 = 365 : average accounts receivable ratio

    So, average accounts receivable ratio = 365 : 40 = 9.125

    Now, average accounts receivable ratio = Net credit sales : average accounts receivable

    9.125 = $9,000,000 : average accounts receivable

    So, Average accounts receivable = $9,000,000 : 9.125 = $986,300

    Hence, the approximate year-end 2018 balance in accounts receivable for Corn Products is $986,300
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “CornProducts Corp. ended the year 2018 with an average collection period of 40 days. The firm's credit sales for 2018 were $9 million. What ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers