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2. Milberg Manufacturing sells on terms of 2/10, net 30. Total sales for the year are $4,500,000. Twenty-five percent of customers pay on the 10th
2. Milberg Manufacturing sells on terms of 2/10, net 30. Total sales for the year are $4,500,000. Twenty-five percent of customers pay on the 10th day and take discounts; the other 75% pay, on average, 45 days after their purchases.
a. What is the day's sales outstanding?
b. What is the average amount of receivables?
c. What would happen to average receivables if Snider toughened its collection policy with the result that all non discount customers paid on the 35th day?
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