At year-end, sample has cash of $ 14,000, current accounts receivable of $ 70,000, merchandise inventory of $ 42,000, and prepaid expenses totaling $ 5,300. liabilities of $ 20 comma 000 must be paid next year. assume accounts receivable had a beginning balance of $ 10 comma 000 and net credit sales for the current year totaled $ 560 comma 000. how many days did it take sample to collect its average level of receivables?

Days to collect receivables = 26 days

Explanation:

At the start Accounts Receivable = $10,000

Ending Accounts Receivable = $70,000

Credit Sales = $560,000

Average Accounts Receivable = ($10,000 + $70,000) / 2

Average Accounts Receivable = $40,000

Accounts Receivable Turnover = Credit Sales / Average Accounts Receivable

Accounts Receivable Turnover = $560,000 / $40,000

Accounts Receivable Turnover = 14

Days to collect receivables = 365 / Accounts Receivable Turnover

Days to collect receivables = 365 / 14

Days to collect receivables = 26 days

a corporation is legally separate from its owner, and it pays its own taxes.

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