Credit Control query

samilou67
samilou67 Registered Posts: 6 New contributor ?
Can anyone shed some light on this for me?

Wilko has been trading with Johny for many years. Johny purchased 1200000 units from will in 2013. Sale price of the product is £6 per unit including VAT. At the end of 2013 johny owed £986301to Wilko.

What is the receivable collection period in days for the amount owed? The answer is 50 but I can't work out how?

Please help.

Comments

  • crispy
    crispy Registered Posts: 465 Dedicated contributor ? ? ?
    Hello,

    The formula for calculation Debtor Days is Debtors / Sales * 365 so..........

    1,200,000 Units @ £ 6 = £ 7,200,000

    Closing Debtors = £ 986,601

    Therefore £ 986,301 / £ 7,200,000 * 365 Days = 50 Days

    Job Done :)
  • samilou67
    samilou67 Registered Posts: 6 New contributor ?
    oh thank you, very grateful
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