Based on the following data for the current year, what is the days' sales in receivables? Assume 365 days a year. Line Item Description Amount Sales on account during year $444,688 Cost of goods sold during year 188,576 Accounts receivable, beginning of year 45,189 Accounts receivable, end of year 51,774 Inventory, beginning of year 80,151 Inventory, end of year 112,830 Round your answer up to the nearest whole day.
Based on the following data for the current year, what is the days' sales in receivables? Assume 365 days a year. Line Item Description Amount Sales on account during year $444,688 Cost of goods sold during year 188,576 Accounts receivable, beginning of year 45,189 Accounts receivable, end of year 51,774 Inventory, beginning of year 80,151 Inventory, end of year 112,830 Round your answer up to the nearest whole day.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Based on the following data for the current year, what is the days' sales in receivables? Assume 365 days a year.
| Line Item Description | Amount |
|---|---|
| Sales on account during year | $444,688 |
| Cost of goods sold during year | 188,576 |
| 45,189 | |
| Accounts receivable, end of year | 51,774 |
| Inventory, beginning of year | 80,151 |
| Inventory, end of year | 112,830 |
Round your answer up to the nearest whole day.
Expert Solution
Step 1: Introducing Days Sales in Receivable
DAYS SALES IN RECEIVABLE
Days Sales to Receivable is a ratio between 360/365 Days and Receivable Turnover Ratio. Days Sales in Inventory indicates the number of Days Credit allowed to the Debtors. Inventory Turnover Ratio is the Ratio between Credit Sales & Average Accounts Receivables.
Debtors Turnover Ratio or Debt to Collection Period ratio measures the quality of debtors since it indicates the speed with which money is collected from the debtor.
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