Data from Davoren Corporation's Most Recent Balance Sheet and Income

question 54

Multiple Choice

Data from Davoren Corporation's most recent balance sheet and income statement appear below: $\begin{array}{lrr}&\text { This Year } & \text { Last Year } \\\text { Accounts receivable. }&\$ 114,000 & \$ 112,000 \\\text { Inventory. }&\$ 160,000 & \$ 189,000 \\\text { Sales on account }&\$ 716,000 & \\\text { Cost of goods sold }&\$ 522,000 &\end{array}$

The average sale period for this year is closest to:

• A)55.7 days
• B)64.4 days
• C)112.0 days
• D)122.1 days

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Definitions:

Federal Income Tax

A tax levied by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Debtor in Possession

A debtor who retains possession and control of their assets while undergoing a reorganization under bankruptcy law, typically in Chapter 11 bankruptcy proceedings.

Liquidating

The process of closing a business and distributing its assets to claimants, often in the event of bankruptcy.

Assets

Resources or items of value owned by an individual or business, which can be used to cover liabilities or generate income.