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At​ year-end, Simpson has cash of $ 10000​, current accounts receivable of $ 10000​, merchandise inventory of $ 44 comma 000​, and prepaid expenses totaling $ 4 comma 300. Liabilities of $ 50 comma 000 must be paid next year. Assume accounts receivable had a beginning balance of $ 5000 and net credit sales for the current year totaled $ 150000. How many days did it take Simpson to collect its average level of​ receivables?

Respuesta :

Answer:

How many days did it take Simpson to collect its average level of​ receivables?

Number of days=18

Explanation:

We determine average net accounts receivable to calculate the accounts receivable turnover ratio.

(Beginning accounts receivable + Ending accounts receivable )/2=  Average net accounts receivable

(5,000+10,000)/2 = 7500

net credit sales/ average net accounts receivable = accounts receivable turnover ratio

150,000/7500=

accounts receivable turnover ratio=20

Number of days=365/20

Number of days=18

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