Question

At​ year-end, has cash of ​, current accounts receivable of ​, merchandise inventory of ​, and prepaid expenses totaling . Liabilities of must be paid next year. Assume accounts receivable had a beginning balance of and net credit sales for the current year totaled . How many days did it take to collect its average level of​ receivables? ​(Assume 365​ days/year. Round any interim calculations to two decimal places. Round the number of days to the nearest whole​ number.)

Answer 1

Answer: 30 days

Step-by-step explanation:

Days to collect receivables = 365/ Average Receivables turnover

Average Receivables turnover = Net credit sales/ Average receivables

Average receivables = (Beginning receivables + ending receivables) /2

= (40,000 + 120,000)/2

= $80,000

Average Receivables turnover = 960,000/80,000

= 12

Days to collect receivables = 365/12

= 30.42 days

= 30 days