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Answer :
According to the question of net sales, 48.7 days was Piper’s average collection period for 2016.
What is net sales?
Net sales refer to the total revenue that a company has earned from the sale of its goods or services, less any discounts, returns, and allowances. It is the total amount of revenue generated from the sale of a company's goods or services during a specific period of time. Net sales are an important measure of a company's financial performance and are often used in financial statements. They are generally recorded as gross sales minus returns, allowances, and discounts, and they exclude any sales tax collected.
Calculation: Average collection period = (Beginning Accounts Receivable + Ending Accounts Receivable) ÷ (Net Sales ÷ 365)
= (640,000 + 800,000) ÷ (2,700,000 ÷ 365)
= 1,440,000 ÷ 7,397.26
= 48.7 days
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