Question

Twist Corp. has a current accounts receivable balance of $335,500. Credit sales for the year just ended were $4,448,730.

A. What is the company's receivables turnover?
B. What is the company's days' sales in receivables?
C. How long did it take on average for credit customers to pay off their accounts during the past year?

Answer 1

a.) 13.26

b.) 27.53 days

c.) 27.53 days

Step-by-step explanation:

Given - Twist Corp. has a current accounts receivable balance of $335,500.

Credit sales for the year just ended were $4,448,730.

To find - A. What is the company's receivables turnover?

B. What is the company's days' sales in receivables?

C. How long did it take on average for credit customers to pay off

their accounts during the past year?

Proof -

a.)

Formula for Receivables turn over is

Receivables turn over = Net credit sales / Average Accounts receivable

=
`(4,448,730)/(335,500)` = 13.26

⇒Company's receivables turnover = 13.26

b.)

Day's sales in receivables = 365 days / Receivable turnovers

=
`(365)/(13.26)` = 27.53

⇒Day's sales in receivables = 27.53 days

c.)

On average , it took 27.53 days for credit customers to pay off their accounts during the past year.