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Question

Safari File Edit View History Bookmarks Window Help ? v2.cengagenow.com l Online teaching and learnin. Based on the following data for the current year, what is the number of days' sales in 1. MC.14-116 2. MC.14-98 Algo 3. MC.14-87 Aigo 421,568 158,728- Net sales on account during year Cost of goods sold during yar Accounts recevable, beginning of year Accounts receivable, end of year Inventory, beginning of year Inventory, end of year 45,251 95,805 104802 MC.14-T8 Round your answer up to the nearest whole day Select the correct answer &. MC.14-81 87 days 137 days 91 days 40 days B. MC 14-110 3/10 items Previous Next 1 2 7 3 9 lab

Explanation / Answer

(1) No of Days sales in receivable =

{(Account Receivable/Total credit sales) * No of Days}

Account Receivable = 45251

Total credit sale = 421668

= {(45251/421668) * 365} = 39.17 or 40 Days

(2) Working Capital = Current asset – Current Liablity

Current Asset:-

Account receivable

74184

Cash

18675

Inventory

75380

Marketable securities

36240

Prepaid Exp

1848

206327

Current Liablities:-

Account Payable

25981

Accrued Liab

6738

Notes Payable (short term)

21798

54517

Working Capital = 206327 – 54517 = 151810