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5 September, 17:27

Based on the following data for the current year, what is the number of days' sales in receivables (rounded to one decimal place) ? Assume 365 days a year. Sales on account during year $546,849 Cost of goods sold during year 202,703 Accounts receivable, beginning of year 49,712 Accounts receivable, end of year 49,559 Inventory, beginning of year 87,452 Inventory, end of year 111,027

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  1. 5 September, 17:31
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    The answer is 33.1 days

    Explanation:

    The number of days' sales in receivables is the number of days it takes a company to convert its credit sales for customers into cash.

    The number of days' sales in receivables = (average accounts receivable : total credit sales) x 365 days.

    Average accounts receivable =

    ($49,712 + $49,559) : 2

    =$49,635.5

    Credit sales = $546,849

    Therefore we have,

    ($49,635.5 : $546,849) x 365days

    33.1 days.
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