Answer:
The Average Collection period is 92 days.
Explanation:
Average collection period is the average number of days between the number of credit sales and the day when the cash is received. It means how many days it will take received cash from the credit sales on average.
Credit Sales = $2,736,000
Account Receivable = $699,200
Average collection period = ( Account receivable / Credit sales ) x 360
Average collection period = ( $699,200 / $2,736,000 ) x 360
Average collection period = 92 days
