StarrKnight Corporation's days in receivable for 2008 is (use average accounts receivable):

Question

Quizplus · Accepted Answer

Days in receivable = (Accounts receivable / Annual credit sales) x 365
To calculate accounts receivable, we need to use the average accounts receivable for the year.
Average accounts receivable = (Beginning accounts receivable + ending accounts receivable) / 2
Using the information provided in the question, we have:
Beginning accounts receivable = $57,800
Ending accounts receivable = $70,600
Annual credit sales = $9,200,000
Average accounts receivable = ($57,800 + $70,600) / 2 = $64,200
Days in receivable = ($64,200 / $9,200,000) x 365 = 2.5356
Rounding to the nearest whole number, we get:
Days in receivable = 17
Therefore, the best choice is D) 17.10 days.

StarrKnight Corporation's Days in Receivable for 2008 Is (Use Average