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22 May, 15:00

Baxley Brothers has a DSO of 26 days, and its annual sales are $6,205,000. What is its accounts receivable balance? Assume that it uses a 365-day year. Round your answer to the nearest cent.

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  1. 22 May, 18:13
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    The receivable balance is $ 442,000

    Explanation:

    The DSO is the abbreviation for Days Sales Outstanding and is referred to in no of days.

    Based on the data in the question, the average daily sales is $ 6,205,000 / 365 days.

    $ 6,205,000 / 365 days = $ 17,000 per day

    If the DSO is 26 days, we need to multiply the average daily sales by the number of days to get the receivable balance

    $ 17,000 * DSO of 26 = $ 442,000
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Home » Business » Baxley Brothers has a DSO of 26 days, and its annual sales are $6,205,000. What is its accounts receivable balance? Assume that it uses a 365-day year. Round your answer to the nearest cent.
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