The balance sheet and income statement for Isnet Corporation are as follows: Isnet's stock was selling for $10 a share at the end of 2007,and there were 1 million shares outstanding. Isnet paid dividends of $0.10 a share in 2007
-Refer to the information above. Approximately how many days are Isnet's customers taking to pay their bills? Assume a 365-day year.

Question

The balance sheet and income statement for Isnet Corporation are as follows:   Isnet's stock was selling for $10 a share at the end of 2007,and there were 1 million shares outstanding. Isnet paid dividends of $0.10 a share in 2007
-Refer to the information above. Approximately how many days are Isnet's customers taking to pay their bills? Assume a 365-day year.

Quizplus · Accepted Answer

To calculate the days sales outstanding (DSO), we divide accounts receivable by the average daily sales. First, we need to find the average daily sales, which is (net sales/365) = ($20,000,000/365) = $54,794.52. Then we divide accounts receivable ($2,000,000) by the average daily sales ($54,794.52), which gives us 36.5. This means Isnet's customers are taking approximately 36.5 days to pay their bills, which is closest to answer choice B (39 days).

The Balance Sheet and Income Statement for Isnet Corporation Are