Ch $04$: End$-$of$-$Chapter Problems $-$ Analysis of Financial Statements

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Attempts $$ Keep the Highest $\frac{0}{1}$

$12.$ Problem $4\mathrm{.}20$

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$$ Problem Walk$-$Through

DSO AND ACCOUNTS RECEIVABLE

Ingraham Inc. currently has $$795,000$ in accounts receivable, and its days sales outstanding $($DSO$)$ is $45$ days. It wants to reduce its DSO to $20$ days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by $5\%.$ What will be the level of accounts receivable following the change? Assume a $365-$day year. Do not round intermediate calculations. Round your answer to the nearest cent.

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