Question

e-Shop, Inc. has net sales on account of​ $1,500,000. The average net accounts receivable are​ $610,000. Calculate the​ days' sales in receivables.​ (Round your answer to two decimal​places.)A.897.90 daysB.148.37 daysC.365.00 daysD.2.46 days

Answer 1

The​ days' sales in receivables are B.148.37 days

Step-by-step explanation:

The​ days' sales in receivables is calculated by using following formula:

The number of days' sales in receivables = 365/Accounts receivable turnover

In there:

Accounts receivable turnover = Net Credit Sales /Average Accounts Receivable

E-Shop, Inc. has net sales on account of​ $1,500,000 and average net accounts receivable of​ $610,000.

Accounts receivable turnover = $1,500,000/$610,000 = 2.46 times

The number of days' sales in receivables = 365/2.46 = 148.37 days