Sales $ 447,600 Cost of goods sold 297,350 Gross profit 150,250 Operating expenses 98,500 Interest expense 4,100 Income before taxes 47,650 Income taxes 19,195 Net income $ 28,455 Assets Cash $ 18,000 Short-term investments 9,000 Accounts receivable, net 30,200 Notes receivable (trade)* 8,000 Merchandise inventory 36,150 Prepaid expenses 2,650 Plant assets, net 151,300 Total assets $ 255,300 Sales $ 447,600 Cost of goods sold 297,350 Gross profit 150,250 Operating expenses 98,500 Interest expense 4,100 Income before taxes 47,650 Income taxes 19,195 Net income $ 28,455 Solution (1) Days Sales Uncollected = [Accounts Receivable /Net Sales] * 365 = [$30,200 / $447,600] * 365 = 24.62days Days SalesUncollected = 24.62 days (2) Days Sales in Inventory = [Inventory /Cost of Sales] * 365 = [$36,150 / $297,350] * 365 = 44.37 days Days SalesUncollected = 44.37.

1. Sales
$
447,600
Cost of goods sold
297,350
Gross profit
150,250
Operating expenses
98,500
Interest expense
4,100
Income before taxes
47,650
Income taxes
19,195
Net income
$
28,455
Assets
Cash
$
18,000
Short-term investments
9,000
Accounts receivable, net
30,200
Notes receivable (trade)*
8,000
Merchandise inventory
36,150
Prepaid expenses
2,650
Plant assets, net
151,300
Total assets

2. $
255,300
Sales
$
447,600
Cost of goods sold
297,350
Gross profit
150,250
Operating expenses
98,500
Interest expense
4,100
Income before taxes
47,650
Income taxes
19,195
Net income
$
28,455
Solution
(1) Days Sales Uncollected = [Accounts Receivable /Net Sales] * 365
= [$30,200 / $447,600] * 365
= 24.62days
Days SalesUncollected = 24.62 days
(2) Days Sales in Inventory = [Inventory /Cost of Sales] * 365
= [$36,150 / $297,350] * 365
= 44.37 days
Days SalesUncollected = 44.37