Practice: 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?

Concept #1: Ratios: Average Collection Period (Days Sales Outstanding)

Practice: 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?

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

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

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.

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

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

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