Trout Lumber Yard has a current accounts receivable balance of $440,016. Credit sales for the year...

Trout Lumber Yard has a current accounts receivable balance of $440,016. Credit sales for the year just ended were $5,153,850.

What is the receivables turnover?

What is the days’ sales in receivables?

How long did it take on average for credit customers to pay off their accounts during the past year?

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Expert Solution

Receivables turnover = Credit Sales / Accounts receivable

Receivables turnover = $5,153,850 / $440,016

Receivables turnover = 11.7129x

Days’ sales in receivables = 365 / Receivables turnover

Days’ sales in receivables = 365 / 11.7129

Days’ sales in receivables = 31.16 days

It took 31.16 days on average for credit customers to pay off their accounts during the past year.

jeff jeffy answered 2 years ago

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