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Oral Roberts Dental Supplies has annual sales of \(5,200,000. Ninety percent are on credit. The firm has \)559,000 in accounts receivable. Compute the value of the average collection period.

Short Answer

Expert verified

The average collection period will be 39 days.

Step by step solution

01

Information provided in the question

Credit sales = $5,200,000

Accounts receivables = $559,000

02

Calculation of average collection period

The average collection period will be 39 days.

Averagecollectionperiod=Accountsreceivable(Creditsales360)=559,000(5,200,000360)=39days

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Esquire Products Inc. expects the following monthly sales:

January

\(28,000

February

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March

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April

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May

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June

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July

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August

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September

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October

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November

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December

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August

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September

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November

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December

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