A company with net sales of $1,642,500, a beginning balance of net receivables of $187,500, and an ending balance of net receivables of $235,500 has a days' sales in receivables (rounded) of:

Question

Quizplus · Accepted Answer

Days' sales in receivables = (average net receivables / average daily sales) * 365

Average net receivables = (beginning balance + ending balance) / 2 = ($187,500 + $235,500) / 2 = $211,500

Average daily sales = net sales / 365 = $1,642,500 / 365 = $4,500

Days' sales in receivables = ($211,500 / $4,500) * 365 = 47. Therefore, the company has a days' sales in receivables of 47 days, which is closest to choice B.

A Company with Net Sales of $1,642,500, a Beginning Balance