Question

A company has annual sales of $5,390,000 and its average daily accounts receivable is $383,000. What...

A company has annual sales of $5,390,000 and its average daily accounts receivable is $383,000. What is the average days' sales in receivables? Assume 365 days per year. (Show your work)

Multiple Choice:

a. 22.17 times

b. 28.82 times

c. 25.94 times

d. 14.07 times

e. 30.26 times

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Answer #1

Calculation of average day sales:

Average day sales= 365*accounts receivable/sales

Average day sales= 365*383000/5390000= 25.94

So correct answer is c) 25.94 times

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