Powers Company reported Net sales of $1,200,000 and Accounts Receivable, net of $78,500. The day's sales uncollected (rounded to whole days) is:
A)24 days.
B)15 days.
C)4 days.
D)56 days.
E)48 days.

Question

Quizplus · Accepted Answer

The day's sales uncollected is calculated by dividing Accounts Receivable by average daily sales. Average daily sales is Net Sales divided by 365 days. So, $78,500 / ($1,200,000 / 365) = 23.86, which rounds to 24 days.

Powers Company Reported Net Sales of $1,200,000 and Accounts Receivable