Question

Accounts Receivable Analysis A company reports the following: Sales $1,182,600 Average accounts receivable (net) 43,800 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover b. Number of days' sales in receivables days

Answer 1

Answer:

a. The account Receivable Turnover is 27 times

b. 13.52 days approximately

Explanation:

1. Account Receivable Turnover = Net sales / Average Account Receivables

Account Receivable Turnover = $1,182,600 / $43,800

Account Receivable Turnover = 27 times

The account Receivable Turnover is 27 times

2. Number of days' sales in receivables days = (Average Account Receivables * 365 days) / Net sales

=(43,800 * 365) / 1,182,600

=13.5185

=13.52 days approximately