The Daisy Company had net credit sales of $830,000 for the year.Cash sales for the year were $1,170,000.Its receivables at the beginning of the year were $45,000 and at the end of the year they had increased to $90,000.The Daisy Company has credit terms of net 30 days.Compute the days' sales outstanding and evaluate the ratio as strong or weak.(Round any intermediary calculations to two decimal places and your final answer to the nearest day. )
A)Days' sales outstanding 30 days;strong
B)Days' sales outstanding 30 days;weak
C)Days' sales outstanding 12 days;strong
D)Days' sales outstanding 12 days;weak

Question

Quizplus · Accepted Answer

$830,000 ÷ 365 = $2,273.97
$67,500 ÷ $2,273.97 = 29.68 days
The days' sales in receivables of 29.68 days is less than 30 days,so the ratio is strong.

The Daisy Company Had Net Credit Sales of $830,000 for the Year.Cash