Credit Control query

samilou67

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.

crispy

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

oh thank you, very grateful