Question

Take me to the text Sleiger Spa has a net accounts receivable opening balance of $223,000 and and ending balance of $176,000. The total sales amount for the year is $758,000, of which 60% is on credit. Calculate the days' sales outstanding and the accounts receivable turnover. Do not enter dollar signs or commas in the input boxes. Round days sales outstanding to the nearest whole number. Days Sales Outstanding = days Round accounts receivable turnover to 2 decimal places. Accounts Receivable Turnover = times Check

Answer 1

a.

Days sales outstanding = 160 days

Days sales outstanding = (Average receivables / total credit sales) *365 ={ [ (223000+176000)/2 ] / [ 758000*60% ] } * 365 = [ 199500/454,800 ] * 365 = 160 days

(Days in the year taken as 365. If there is any error, consider days as 360 and answer would be 158 days in that case)

b.

Accounts receivable turnover = 2.28 times

Accounts receivable turnover = Net credit sales / average accounts receivable = 454800/199500 = 2.28 times