Natcher Corporation's Accounts Receivable at the End of Year 2

question 239

Multiple Choice

Natcher Corporation's accounts receivable at the end of Year 2 was $138,000 and its accounts receivable at the end of Year 1 was $144,000. The company's inventory at the end of Year 2 was $142,000 and its inventory at the end of Year 1 was $133,000. Sales, all on account, amounted to $1,395,000 in Year 2. Cost of goods sold amounted to $813,000 in Year 2. The company's operating cycle for Year 2 is closest to: (Round your intermediate calculations to 1 decimal place.)

• A) 46.8 days
• B) 71.8 days
• C) 67.8 days
• D) 98.8 days

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Definitions:

Asset Accounts

Accounts that detail the resources owned by a business which have economic value and can be converted into cash.

Accounts Receivable

Outstanding amounts that customers owe to a business for delivered goods or services yet to be paid for.

Supplies Expense

Costs associated with the consumable items used in the daily operations of a business, which may include office or manufacturing supplies.

Buildings

Assets classified in accounting, representing structures owned by a business for purposes such as offices, manufacturing, or storage.