e-Shop, Inc. has net sales on account of $1,500,000. The average net accounts receivable are $610,000. Calculate the days' sales in receivables. (Round your answer to two decimal places.) A. 897.90 daysB. 148.37 daysC. 365.00 daysD. 2.46 days

Question

Tia Sullivan

Business

18 May, 06:47

e-Shop, Inc. has net sales on account of $1,500,000. The average net accounts receivable are $610,000. Calculate the days' sales in receivables. (Round your answer to two decimal places.) A. 897.90 daysB. 148.37 daysC. 365.00 daysD. 2.46 days

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Vaughn Mcgee · Answer 1

The days' sales in receivables are B. 148.37 days

Explanation:

The days' sales in receivables is calculated by using following formula:

The number of days' sales in receivables = 365/Accounts receivable turnover

In there:

Accounts receivable turnover = Net Credit Sales / Average Accounts Receivable

E-Shop, Inc. has net sales on account of $1,500,000 and average net accounts receivable of $610,000.

Accounts receivable turnover = $1,500,000/$610,000 = 2.46 times

The number of days' sales in receivables = 365/2.46 = 148.37 days