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20 March, 05:05

Han Corp's sales last year were $485,000, and its year-end receivables were $52,500. The firm sells on terms that call for customers to pay 30 days after the purchase, but some delay payment beyond Day 30. On average, how many days late do customers pay

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  1. 20 March, 05:12
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    Customers pay 9.51 days late

    Explanation:

    In order to calculate how many days late do customers pay we would have to calculate the following formula:

    day sales outstanding=365 days/account receivables ratio

    account receivables ratio=net credit sales/Average account receivables

    account receivables ratio=$485,000/$52,500

    account receivables ratio=9.238 times

    day sales outstanding=365 days/9.238 times

    day sales outstanding=39.51 days

    Therefore, days late=39.51-30

    =9.51

    Customers pay 9.51 days late
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