Question

Based on the following data for the current year, what is the number of days' sales in receivable?

Net sales on account during year $578,168
Cost of goods sold during year 204,009
Accounts receivable, beginning of year 47,923
Accounts receivable, end of year 50,159
Inventory, beginning of year 87,293
Inventory, end of year 113,593
Round your answer up to the nearest whole day.

Select the correct answer.

a)31 days

b)72 days

c)63 days

d)129 days

Answer 1

Answer:

Number  of days sales in receivables

= Average  receivables  x  365 days

  Sales

=  $49,041   x 365 days                                                                                                                                      

   $578,168

= 31 days

Explanation:

Average number of days sales in receivables is the ratio of average receivables to sales multiplied by 365 days. Average receivable is the aggregate of beginning and closing receivables divided by 2.