Gross total sales 4 00 000 Cash Sales 80 000 Sales Return 28 000 Debtors at end 36 000 Bills Receiva...........

Costing - Phase (I & II) Methods of Costing

Gross total sales: 4,00,000/-

Cash Sales: 80,000/-

Sales Return: 28,000/-

Debtors at end: 36,000/-

Bills Receivable at end: 8,000/-

Provision for Doubtful Debts: 3,000/-

Total creditors at the end: 25,000/-

Average Collection period will be:

55 days

50 days

45 days

60 days

Average Collection period=

= Trade Debtors x Number of working days in year/Net Sales

= (36,000 + 8,000 x 365)/ (4,00,000 – 80,000- 28,000) = 55 days

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