The following current year information is available from a manufacturing company:Sales $740,000Gross profit on sales276,000Operating income64,000Income before taxes44,000Net income33,600Accounts Receivable, beginning-year 58,000Accounts Receivable, end-of-year72,000Calculate the company's accounts receivable turnover and its days' sales uncollected.
What will be an ideal response?
Accounts receivable turnover = $740,000/[$58,000 + $72,000)/2] = 11.4 times
Days' sales uncollected = ($72,000/$740,000) * 365 = 35.5 days
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