Net credit sales total $ 1 comma 431 comma 000. Beginning and ending accounts receivable are $ 69 comma 000 and $ 37 comma 000 , respectively. Calculate the days' sales outstanding. (Round interim calculations to two decimal places, XX. XX and the days' sales outstanding (DSO) up to the next whole day.) A. 11 days B. 20 days C. 14 days D. 9 days

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Business

Mina Cochran

Today, 09:13

Net credit sales total $ 1 comma 431 comma 000. Beginning and ending accounts receivable are $ 69 comma 000 and $ 37 comma 000 , respectively. Calculate the days' sales outstanding. (Round interim calculations to two decimal places, XX. XX and the days' sales outstanding (DSO) up to the next whole day.) A. 11 days B. 20 days C. 14 days D. 9 days

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Dickens · Answer 1

The days' sales outstanding: C. 14 days

Explanation:

Average Accounts Receivable = (The beginning accounts receivable balance + The ending accounts receivable balance) / 2 = ($69,000 + $37,000) / 2 = $53,000.

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable = $1,431,000/$53,000 = 27 times

The days' sales outstanding = 365/Accounts receivable turnover ratio = 365/27 = 14 days