Calculate AP’s forecast trade receivables days outstanding at 31 March 20X7?

Sophljon

AP had a balance on trade receivables at 30 September 20x6 of £68,000. Forecast credit sales for the next six months are £250,000 and customers are expected to return goods with a sales value of £2500.
Based on past experience, within the next six months AP expects to collect £252,100 cash and to write off, as irrecoverable debts, 5% of the balance outstanding at 30 September 20X6

Sophljon

Please can someone help with the above I can’t get my head around it

PeterC

If you are looking for the closing balance on the Receivable Control Account, after 3 months, it is £60,000 (Dr), as shown below



If you prefer this as a T-account, I have shown which entries would be Dr and which Cr

Sophljon

Thank you Peter, I did this part this question then goes on to ask you how many receivable days are outstanding at 31 March 20X7? Please would you be able to assist with this part?

PeterC

There are a few different definitions of receivable days
One of these is
365 x average receivables/net credit sales

Average receivables = (68,000 + 60,000)/2 - £64,000
Net credit sales = 250,000 - 2,500 = £247,500
Receivable days = 365 x 64,000/247,500 = 94 days