Qwik Stop has accounts receivable of $4,830, inventory of $9,083, sales of $38,600, and cost of goods sold of $21,400. How many days does it take the firm to both sell their inventory and collect the payment on the sale?
A) 186 days
B) 193 days
C) 201 days
D) 214 days
E) 217 days

Question

Quizplus · Accepted Answer

Days' sales in inventory = (Inventory / Cost of goods sold) x 365 days= ($9,083 / $21,400) x 365 days= 160 daysDays' sales outstanding = (Accounts receivable / Sales) x 365 days= ($4,830 / $38,600) x 365 days= 41 daysTotal days = Days' sales in inventory + Days' sales outstanding= 160 days + 41 days= 201 days

Qwik Stop Has Accounts Receivable of $4,830, Inventory of $9,083