Based on the following data for the current year, what is the number of days' sales in accounts receivable? Net sales on account during year $584,000 Cost of merchandise sold during year 300,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000

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Business

Babykins

25 May, 04:52

Based on the following data for the current year, what is the number of days' sales in accounts receivable? Net sales on account during year $584,000 Cost of merchandise sold during year 300,000 Accounts receivable, beginning of year 45,000 Accounts receivable, end of year 35,000 Inventory, beginning of year 90,000 Inventory, end of year 110,000

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Maximillian Mejia · Answer 1

25 Days

Explanation:

Average Account receivables:

= (Accounts receivables, beginning of year + Account receivables, end of year) : 2

= (45,000 + 35,000) : 2

= 40,000

Account Receivables Turnover = Net Sales on Account : Average Account Receivables

Account Receivables Turnover = 584,000 : 40,000

= 14.6 times

No. of Days Sales in Accounts Receivables:

= No. of Days in a year : Account Receivables Turnover

= 365 : 14.6

= 25 Days