Question

CHIC UTIV Help QS 8-10 Days' sales uncollected LO A1 10 The following annual account balances are from Armour Sports at December 31 points bonitor Accounts receivable Net Sales Year 2 $ 100,000 $ 85,000 2,500,000 2,000,000 Complete the below table to calculate the number of days' sales uncollected for the years Year 1 and Year 2 (Round your Uncollected" to 1 decimal place.) Print Choose Numerator: Days Sales Uncollected Choose Denominator: * Days References - Year 2 Days Sales Uncollected Days' sales uncollected days days Year 1: Is the company's collection of receivables improving? Yes O No

Answer 1

	Accounts Receivable		/	Net Sales	x	365	=	Days' sales uncollected
Year 2	$             100,000.00		/	$ 2,500,000.00	x	365	=	14.6	days
Year 1	$                85,000.00		/	$ 2,000,000.00	x	365	=	15.5	days

Yes, the company's collection of receivables is improving,

as it it's taking lesser time (i.e., 14.6 days), as compared to

what it was taking in the previous year (i.e., 15.5 days), to collect

outstanding balances from it’s customers.