The following selected information relates to Belcher Unlimited for the past two years. Days' sales in receivables for the current year is closest to
A)47.68 days.
B)52.61 days.
C)57.55 days.
D)2)10 days.

Question

The following selected information relates to Belcher Unlimited for the past two years.  Days' sales in receivables for the current year is closest to
A)47.68 days. 
B)52.61 days. 
C)57.55 days. 
D)2)10 days.

Quizplus · Accepted Answer

Days' sales in receivables = (Accounts receivable / Net sales) x Number of days in the year

For current year:
Accounts receivable = $801,000
Net sales = $12,750,000
Number of days in the year = 365

Days' sales in receivables = ($801,000 / $12,750,000) x 365 = 22.86

Therefore, Belcher Unlimited's Days' sales in receivables for the current year is closest to 22.86, which is closest to 23 days. Therefore, the answer is B) 52.61 days.

The Following Selected Information Relates to Belcher Unlimited for the Past