Question
In: Accounting
At the end of 2018, accounts receivable amounted to $163,000. At the beginning of the year...
At the end of 2018, accounts receivable amounted to $163,000. At the beginning of the year it was $242,000. Net credit sales for the year amounted to $720,000 and net income was calculated to be $197,000.
Determine the days sales outstanding ratio and the accounts receivable turnover ratio.
Do not enter dollar signs or commas in the input boxes.
Round your answer to 2 decimal places.
Days Sales Outstanding = Answer days
Accounts Receivable Turnover = Answer times
Solutions
Expert Solution
Solution
Days Sales Outstanding =102.53 days or 101.12 days
Accounts Receivable Turnover = 3.56 Times
Working
| Accounts receivables Turnover ratio | ||||||
| Net Credit Sales | / | Average receivable | = | Accounts receivables Turnover ratio | ||
| $ 720,000.00 | / | $ 202,500.00 | = | 3.56 | Times | |
.
| Average collection period | ||||||
| Days in a year | / | Accounts receivables Turnover ratio | = | Average collection period | ||
| 365 | / | 3.56 | = | 102.53 | Days | |
.
| Beginning balance | $ 242,000.00 |
| Ending balance | $ 163,000.00 |
| Total | $ 405,000.00 |
| Average Receivables | $ 202,500.00 |
ekkarill92 answered 2 years agoRelated Solutions
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