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A company has net credit sales of​ $1,400,000, beginning net accounts receivable of​ $300,000, and ending net accounts receivable of​ $200,000. What is the​ days' sales in accounts​ receivable? (Use 365 days in calculations as needed. Round any intermediate calculations to two decimal​ places, and your final answer to the nearest whole​ day.)

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waseemanis1

Answer:

Turnover: 5.60 times

Days sales in accounts receivables: 65 Days.

Explanation:

Calculation of Days Sales in Accounts Receivable = 365 / Turnover

Turnover = Sales / Average balance of trade receivables*

Average balance of trade receivables = (Closing Balance + Opening Balance) / 2.

Turnover:  1,400,000 / {(200,000 + 300,000)/2} = 5.60 times

Days sales in accounts receivables: 365 / 5.6 = 65 days

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