Detailed Answer
Choice "c" is correct. Days’ sales in accounts receivable is normally calculated as Days’ sales = Ending
accounts receivable 1 Average daily sales. However, that formula will not work in this case because the
necessary information is not provided. However, enough information about payments is provided so that the
total days’ sales can be determined on a weighted average basis. In this question, nobody pays before the
10th day and 60% of the customers pay on the 10th day, so there are 10 x .60, or 6 day’s sales there. The
other 40% of the customers pay on the 30th day so there are 30 x AD, or 12 day’s sales there. The total is 18
days sales.