Ratios: Average Collection Period (Days Sales Outstanding)

Concept: Ratios: Average Collection Period (Days Sales Outstanding)

7m

Problem: ABC Company had $200,000 in Net Sales and Gross Profit of $80,000. If AR had a balance of $16,000, what are the days’ sales outstanding?

2m

Ratios: Average Collection Period (Days Sales Outstanding) Additional Practice Problems

ABC Company reported net sales revenue of $2,880,000 during 2005 and an average collection period of 45.625 days. ABC Company reported accounts receivable of $400,000 on the December 31, 2005 balance sheet.

Calculate the amount of accounts receivable at January 1, 2005.

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Consider the following financial data for Steve’s Pool Supply:

Calculate Steve’s average collection period for accounts receivable.

a. 125.5 days

b. 50.2 days

c. 0.3 days

d. 69.1 days

e. 98.7 days

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Braswell & Associates has a DSO of 52 days, and its annual sales are $8,600,000.  What is its accounts receivable balance?  Assume it uses a 365-day year.

a. $1,225,205

b. $453

c. $165,385

d. $447,200,000

e. $695,295

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Consider the following financial data for Steve’s Pool Supply:

Calculate Steve’s average collection period for accounts receivable.

a. 374.5 days

b. 120.8 days

c. 109.9 days

d. 312.0 days

e. 0.3 days

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Braswell Associates has a DSO of 52 days, and its annual sales are $8,600,000.  What is its accounts receivable balance?  Assume it uses a 365-day year.

a. $453

b. $165,385

c. $1,225,205

d. $447,200,000

e. $695,295

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A company has the following data: sales $500,000, cost of goods sold $200,000, operating expenses $100,000, average inventory $8,000, and accounts receivable $10,000. What is its number of days' sales uncollected?

A.18.25 days

B.7.3 days

C.25 days

D.30 days

E.None of the above

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