Burnside's Has Accounts Receivable of $42,600,inventory of $97,200,sales of $614,200,and

question 5

Multiple Choice

Burnside's has accounts receivable of $42,600,inventory of $97,200,sales of $614,200,and cost of goods sold of $298,400.How long does it take the firm to sell its inventory and collect payment on the sale?

• A)107.14 days
• B)136.06 days
• C)127.78 days
• D)144.21 days
• E)115.52 days

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Definitions:

Accounts Payable

Liabilities of a company that represent amounts owed to creditors for goods and services received but not yet paid for.

Journal Entry

A record in the books of account that represents a financial transaction.

Payroll Taxes Expense

Taxes that employers are required to pay based on the wages and salaries of their employees, such as Social Security and Medicare taxes.

FICA Tax

A U.S. federal payroll tax used to fund Social Security and Medicare, distributed between employees and employers.