Read the passage carefully and answer the next five questions (value in fraction is to be rounded off to the nearest value).

Average collection period is -

45 days

The correct answer is option 2- 45 days.

Average Trade Receivable = Trade debtors + Bills receivable
                                      = 59,000 + 48,000
                                      = 1,07,000

Trade Receivable Turnover Ratio = Net Credit Revenue from operations / Average Trade Receivable
                                               = 8,75,000/1,07,000
                                               = 8.177 times or 8.18 times

Average collection period = 365/ Trade Receivable Turnover Ratio
                                     = 365/8.177
                                     = 44.62 or 45 days