Use the Following Information for Questions:
Blue Sea Corporation's Books

question 28

Multiple Choice

Use the following information for questions:
Blue Sea Corporation's books revealed the following for 2011 and 2010: $$\begin{array} { l c r } & 2011 & 2010 \\\text { Cash } & 27,750 & \$ 21,250 \\\text { Accounts receivable }& 42,000 & 37,500 \\\text { Inventory } & 72,250 & 61,600 \\\text { Other prepaid assets } & 12,500 & 12,500 \\\text { Accounts payable } & 41,250 & 38,000 \\\text { Other current payables } & 13,000 & 15,000 \\\text { Sharehol ders' equity }& 100,250 & 79,850 \\\text { Sales } & 525,000 & 450,750 \\\text { Cost of sales }& 300,000 & 240,750 \\\text { Operating expenses } & 70,000 & 65,000 \\\text { Net income } & 155,000 & 145,000\end{array}$$
-The number of days to collect the average receivable in 2011 was closest to:

• A)28 days
• B)29 days
• C)30 days
• D)31 days

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Definitions:

Secondary Obligation

A duty or liability that is dependent on the occurrence or non-occurrence of certain conditions or the failure to perform a primary obligation.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise if the other party has significantly relied on that promise to their detriment, even if there is no formal contract.

Statute Of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the parties involved to be enforceable.

Profit Sharing

A corporate incentive plan where employees receive a portion of the company's profits, linking compensation to the company's financial performance.