Guliana Company reported net sales of $150,000 for the current year. Accounts Receivable at the beginning of the year was $17,000 and $15,000 at the end of year. The days' sales in average receivables was closest to:

Question

Quizplus · Accepted Answer

First, we need to calculate the average balance of accounts receivable for the year:

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2 
= ($17,000 + $15,000) / 2 
= $16,000

Next, we can calculate the Days' Sales in Average Receivables using the formula:

Days' Sales in Average Receivables = (Accounts Receivable / Net Sales) x 365

Plugging in the numbers, we get:

Days' Sales in Average Receivables = ($16,000 / $150,000) x 365 
= 38.67

Rounding to the nearest tenth, we get closest to 38.9 days, which is answer choice D.

Guliana Company Reported Net Sales of $150,000 for the Current