At year-end, simpson has cash of $ 1, current accounts receivable of $ 1, 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 $ 15. how many days did it take simpson to collect its average level of receivables?

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