Question

A company reports the following: Sales $3,150,000 Average accounts receivable (net) 210,000 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover fill in the blank 1 b. Number of days' sales in receivables

Answer 1

a. Account Receivables turnover = Sales / Average Account Receivables

Account Receivables turnover = $3,150,000 / $210,000

Account Receivables turnover = 15

b. Number of days sales in receivables = 365 / Account Receivables turnover

Number of days sales in receivables = 365 days / 15

Number of days sales in receivables = 24.33 days