Based on the statements below, the average collection period for 2020 is:

a. 8.97 times

b. 40.69 days

c. 40.13 days

d. $2,795 per day

Balance Sheet

2020 2019 Change

Current assets:

Cash $108,000 $91,500 $16,500

Accounts receivable 117,000 91,000 26,000

Inventory 96,000 60,000 36,000

Marketable securities 14,000 38,000 (24,000)

Prepaid expenses 10,000 36,000 (26,000)

Long-term assets

Plant & equipment (net) 296,000 175,000 121,000

Land 42,000 91,000 (49,000)

Patent 53,000 63,000 (10,000)

Total Assets 736,000 645,500

Current liabilities:

Accounts payable 41,000 27,000 14,000

Interest payable 13,200 64,000 (50,800)

Other accruals 22,400 12,000 10,400

Tax payable 2,500 14,500 (12,000)

Note payable 31,250 10,000 21,250

Long-term liabilities

Mortgage payable 51,000 61,000 (10,000)

Bond payable 107,000 150,000 (43,000)

Stockholder's equity

Common stock 350,000 250,000 100,000

Paid-in-capital 35,000 10,000 25,000

Retained earnings 82,650 47,000 35,650

Total Liabilities and Equity 736,000 645,500

Income Statement

For the Year Ended December 31, 2020

Revenues:

Sales (All on credit) $1,050,000

Expenses:

Cost of goods sold 530,050

Depreciation expense 90,000

*Other operating expenses 182,000

Interest expense 75,000

Tax expense 38,000

Total expense 915,050

Net Income 134,950

*(Includes $20,000 of amortization expense for patent and $20,000 of a lease expense, which is a fixed charge)