The bear rug has sales of $811,000. the cost of goods sold is equal to 63 percent of sales. the beginning accounts receivable balance is $41,000 and the ending accounts receivable balance is $38,000. how long on average does it take the firm to collect its receivables?
(a) 17.26 days
(b) 17.78 days
(c) 18.58 days
(d) 20.44 days
(e) 29.77 days

B. 17.78 days

Explanation:

Days Sales Outstanding or Age of Receivables measures the average number of days it take for a company to collect its receivables.

This is computed by dividing the Average Accounts Receivables over Daily Sales. Bear Rug's Average Accounts Receivable is $39,500 ($41,000 + $38,000/2) while its Daily Sales is 2,222 ($811,000/365).

Thus, the average days for the firm to collect its receivables are 17.78 days ($39,500/2,222).

answer; /// the correct answer is (10) days; /// good luck

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