Route Canal Shipping Company
Please see attachment for table.
a. Fill in column (4) for each month.
b. If the firm had $1,440,000 in credit sales over the four-month period, compute
the average collection period. Average daily sales should be based on a
c. If the firm likes to see its bills collected in 30 days, should it be satisfied with
the average collection period?
d. Disregarding your answer to part c and considering the aging schedule for
accounts receivable, should the company be satisfied?
e. What additional information does the aging schedule bring to the company
that the average collection period may not show?
This question involves the fundamentals of finance.