Radiance Solar Panels, Which Sells Solar Systems to the Construction

Multiple Choice

Radiance Solar Panels, which sells solar systems to the construction industry, sells all of its products on credit, and requires its customers to pay within 30 days. Last year, the company's credit sales totaled about $800,000 and its average accounts receivable was close to $80,000. Which statement is true about the company's accounts receivable turnover?

A) Radiance's accounts receivable turnover is about 10% and the average age of its receivables is roughly 80 days, which means that nearly all customers are paying late, given its 30-day payment policy.
B) Radiance's accounts receivable turnover is about 10 times per year and the average age of its receivables is roughly 30 days, which means that most customers are paying on time, given its 30-day payment policy.
C) Radiance's accounts receivable turnover is about 8 times per year so the average age of its receivables is roughly 45 days, which means that many customers are paying late, given its 30-day payment policy.
D) Radiance's accounts receivable turnover is about 10 times per year so the average age of its receivables is roughly 36.5 days, which means that some customers are paying late, given its 30-day payment policy.