In: Finance
Medwig Corporation has a DSO of 34 days. The company averages $7,250 in sales each day (all customers take credit). What is the company's average accounts receivable? Round your answer to the nearest dollar.
Information provided:
Days of sales outstanding= 34 days
Credit sales= $7,250
Days of sales outstanding= Average accounts receivable/ Credit sales
Average accounts receivable= Days of sales outstanding* Credit sales
= 34*$7,250
= $246,500.
Therefore, the company’s average accounts receivable is $246,500.
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