Mervyn’s Fine Fashions has an average collection period of 50 days. The accounts receivable balance is $95,000. What is the value of its credit sales?
7-10. Solution:
Mervyn’s Fine Fashion
Average collection period= (xxx)/(xxx)
Average daily credit sales=annual credit sales/xxx
Therefore,average collection period= (xxx)/(xxx/xxx)
annual credit sales/xxx= (xxx)/(xxx)
annual credit sales/xxx= $xxx/(xxx)=$xxx
annual credit sale=$xxx×xxx
=$xxx, xxx
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