At year-end, spring has cash of $ 11,000, current accounts receivable of $ 20,000, merchandise inventory of $ 35,200, and prepaid expenses totaling $ 4,200. liabilities of $ 40,000 must be paid next year. assume accounts receivable had a beginning balance of $ 80,000 and net credit sales for the current year totaled $ 800,000. how many days did it take spring to collect its average level of receivables?

Days to collect receivables = 22.812

Explanation:

given data

cash = $ 11,000

current accounts receivable = $20,000

merchandise inventory = $35,200

prepaid expenses totaling = $4,200

Liabilities = $40,000

accounts receivable beginning= $ 80,000

net credit sales= $ 800,000

to find out

How many days did it take Spring to collect its average level of receivables

solution

we first get here Average Receivables that is

Average Receivables =

Average Receivables =

Average Receivables = 50000

and

now turnover will be here

turnover =

turnover =

turnover = 16

so Days to collect receivables is

Days to collect receivables =  

Days to collect receivables = 22.812

we consider here 365 days in a year

d) social security number

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