###
**CFA Practice Question**

Determine net sales for 20x2 if the average days sales uncollected is 73 days and accounts receivable was $4,250 at the end of 20x1 and was $4,750 at the end of 20x2.

A. $23,750

B. $22,500

C. $21,250

**Explanation:**Net sales equals average accounts receivable multiplied by the receivable turnover. The receivable turnover equals 365 days divided by the average number of days sales are uncollected. Average accounts receivable equals $4,500 [($4,250 + $4,750)/2]. Therefore, net sales are $22,500 [($4,500 x (365/73)].

###
**User Contributed Comments**
3

User |
Comment |
---|---|

shiva5555 |
What does this 20X2 and 20X1 mean? |

endurance |
any year ending on 1 or 2 in this century |

cfastudypl |
They mean the opening and closing balances of the receivables accounts. That is, 20X1's value ($4,250) was the closing balance for 20X1 became the opening balance for 20X2. While $4,750 is the closing balance for 20X2. |