Geisel, Inc. reported net sales revenue of $515,000 in 2018 and $627,000 in 2019. The company’s ending net receivables were $127,000 during 2017 and $124,000 during 2018. At December 31, 2019, the company had Accounts Receivable of $159,000 and an unadjusted debit balance in its Allowance for Doubtful Accounts account of $1,900. The company reported Bad Debt Expense of $11,350 during 2018. Required: Determine the net receivables at December 31, 2019. Calculate the receivables turnover ratio for 2018 and 2019. Calculate the days to collect for 2018 and 2019.

The ratio are worked out below;                                        

Explanation:

Net Receivable December 31,2019

Account Receivable     $159,000

Bad Debt Expense         ($11,350)

Allowance for doubtful accounts ($1,900)

Net Receivables                     $145,750

                                                2018                      2019

Receivable turnover ratio   *  4.1                          **4.64

(Net Sales/Average Receivables)

*($515,000/((127,000+124,000)/2)

**($627,000/((124,000+145,750)/2)

Days to collect                 ***88.9 days                 78.5 days

(Average receivables/Net sales)*365

***(((127000+124000)/2)/515,000)*365

(((124,000+145,750)/2)/627,000)*365

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