At year-end, Simple has cash of $12,000, current accounts receivable of $60,000, merchandise inventory of $37,200, and prepaid expenses totaling $5,200. Liabilities of $24,000 must be paid next year. Assume accounts receivable had a beginning balance of $20,000 and net credit sales for the current year totaled $2,400,000. How many days did it take Simple to collect its average level of receivables? (Assume 365 days/year.)
At year-end, Simple has cash of $12,000, current accounts receivable of $60,000, merchandise inventory of $37,200, and prepaid expenses totaling $5,200. Liabilities of $24,000 must be paid next year. Assume accounts receivable had a beginning balance of $20,000 and net credit sales for the current year totaled $2,400,000. How many days did it take Simple to collect its average level of receivables? (Assume 365 days/year.)
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 3P
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Transcribed Image Text:At year-end, Simple has cash of $12,000, current accounts
receivable of $60,000, merchandise inventory of $37,200,
and prepaid expenses totaling $5,200. Liabilities of $24,000
must be paid next year. Assume accounts receivable had a
beginning balance of $20,000 and net credit sales for the
current year totaled $2,400,000.
How many days did it take Simple to collect its average level
of receivables? (Assume 365 days/year.)
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