A company has net credit sales of $ 1 comma 300 comma 000 , beginning net accounts receivable of $ 270 comma 000 , and ending net accounts receivable of $ 202 comma 000. What is the days' sales in accounts receivable? (Use 365 days in calculations as needed. Round any intermediate calculations to two decimal places, and your final answer to the nearest whole day.)

Question

Kayleigh Lin

Business

25 September, 09:27

A company has net credit sales of $ 1 comma 300 comma 000 , beginning net accounts receivable of $ 270 comma 000 , and ending net accounts receivable of $ 202 comma 000. What is the days' sales in accounts receivable? (Use 365 days in calculations as needed. Round any intermediate calculations to two decimal places, and your final answer to the nearest whole day.)

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Answers (1)

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Darnell Barker · Answer 1

66.36 days

Explanation:

Calculation of the days' sales in accounts receivable.

Using this formula

Accounts Receivable Turnover Ratio = [Net credit sales (Beginning net account receivable + Ending net account receivable) / 2) ]

Let plug in the formula

[$1,300,000 / ($270,000 + $202,000) / 2) ]

$1,300,000 / ($472,000/2)

=$1,300,000/236,000

=$5.50 Days' sales in receivables

= 365/5.5

= 66.36 days

Therefore the days' sales in accounts receivable will be 66.36 days