BUSINESS HIGH SCHOOL

A company has an average collection period (ACP) of 20 days and AR balance of $100,000. Assume 365 days. Note: ACP is same as AR Period.What is the Accounts Receivables Turnover (ART)?
What is the sales amount?

Answers

Answer 1
Answer:

The Accounts Receivables Turnover (ART) for this company is 18.25 and the sales amount is $1,825,000.

The Accounts Receivables Turnover (ART) is a measure of how efficiently a company is able to collect on its outstanding accounts receivables. It is calculated by dividing the total sales amount by the average accounts receivable balance.

To find the ART for this company, we can use the following formula:

ART = 365 days / ACP

= 365 days / 20 days

= 18.25

This means that the company's ART is 18.25, indicating that it is able to collect on its outstanding accounts receivables 18.25 times per year.

To find the sales amount, we can use the following formula:

Sales amount = ART x AR balance

= 18.25 x $100,000

= $1,825,000

Therefore, the sales amount for this company is $1,825,000.

In conclusion, the Accounts Receivables Turnover (ART) for this company is 18.25 and the sales amount is $1,825,000.

To know more about ART refer here:

brainly.com/question/16447941

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Answers

Answer:

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Answers

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Answers

Answer:

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Answers

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