Answer (C) is correct . The operating cycle is the time needed to turn cash into inventory, inventory into receivables, and receivables back into cash. It is equal to the sum of the number of days’ sales in inventory and the number of days’ sales in receivables. The number of Carson’s days’ sales in inventory is given as 54 days. The number of days’ sales in receivables is given as 24. Therefore, the number of days in the operating cycle is 78 (54 + 24).
Answer (A) is incorrect because The sum of the number of days’ sales in receivables and the number of days’ purchases in accounts payable is 60.
Answer (B) is incorrect because The sum of the number of days’ sales in inventory and the number of days’ purchases in payables is 90.
Answer (D) is incorrect because The sum of the number of days’ sales in inventory and the number of days’ sales in receivables minus the number of days’ purchases in payables is 42.
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The number of days in Carson’s operating cycle for the current year was
