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Homework answers / question archive / The following is the schedule for Accounts Receivable of Tokhan, Industries: Age of Accounts Receivables Accounts Receivable Average days collected 0-30 $1,200,000 25 31-60 720,000 50 61-90 336,000 75 Over 90 days 144,000 100 The days sales outstanding is?
The following is the schedule for Accounts Receivable of Tokhan, Industries:
|
Age of Accounts Receivables |
Accounts Receivable |
Average days collected |
|
0-30 |
$1,200,000 |
25 |
|
31-60 |
720,000 |
50 |
|
61-90 |
336,000 |
75 |
|
Over 90 days |
144,000 |
100 |
The days sales outstanding is?
Total accounts receiavbles=1,200,000+720,000+336,000+144,000=2400000
0-30 days weight=1,200,000/2400000=50%
31-60 days weight=720,000/2400000=30%
61-90 days weight=336,000/2400000=14%
over 90 days weight=144,000/2400000=6%
days sales outstanding=(50%*25)+(30%*50)+(14%*75)+(6%*100)=44 days
