The following information relates to Mercury Ltd

Economics Nov 11, 2020

The following information relates to Mercury Ltd. Accounts receivable Credit sales 20x5 $33995 286201 20x6 $ 50148 327921 What is Mercury's days sales in accounts receivable for the year 20x6? Select one: O a. 306 days Ob. 46.83 days O c. 56 days O d. 43.35 days

Expert Solution

c. 56 days.

Days sales =

(Accounts receivable/Credit sales)*n

Where n is the number of days in the period. Here, the period is a year. So, we take n = 365.

So, Days sales for the year 20x6 =

(50148/327921)*365 = 55.81 ~ 56.

So, the correct answer is 56 days.

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