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

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

hope this

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