Question

A company had net sales of 31,500 and ending accounts receivable of 2,700 for the current period. Its days' sales uncollected equals:

1) 42.5 days
2) 31.3 days
3) 11.7 days
4) 46.6 days
5) 23.3 days

Answer 1

The days' sales uncollected for the company is calculated by dividing ending accounts receivable by net sales and then multiplying by 365 days, which results in 2) 31.3 days.

Step-by-step explanation:

The student is asking for help calculating the days' sales uncollected, which is a financial ratio that measures the average number of days that a company takes to collect revenue after a sale has been made. To calculate this ratio, we use the formula: Days' Sales Uncollected = (Ending Accounts Receivable / Net Sales) × 365 days.

Using the provided figures, the calculation is as follows:

Days' Sales Uncollected = (2,700 / 31,500) x 365 = 31.3 days.

Therefore, the correct answer to the student's question is option 2) 31.3 days.