With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2016 is closest to:
A)$14,525
B)$16,970
C)$22,710
D)$19,690
E)$23,548

Question

Quizplus · Accepted Answer

To calculate the forecasted accounts receivable, we need to use the following formula:
Accounts Receivable Days = (Accounts Receivable / Average Daily Sales)

We know that the target accounts receivable days is 60, and we can assume that the average daily sales will stay the same as last year (since the question does not mention any changes to sales).

Let's rearrange the formula to solve for Accounts Receivable:

Accounts Receivable = Accounts Receivable Days x Average Daily Sales

Accounts Receivable = 60 days x $283.60 = $17,016

However, the question is asking for the closest answer, which is B) $16,970.

With the Proper Changes It Is Believed That Ideko's Credit