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3. Accounts receivable Consider the case of Osato Chemicals Inc.: Osato Chemicals Inc. has a very attractive credit policy, and none of its customers pays
3. Accounts receivable Consider the case of Osato Chemicals Inc.: Osato Chemicals Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Osato Chemicals Inc. sells to its customers on credit terms of 1/10, net 30. If a customer bought $125,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Osato Chemicals Inc. get from the customer? If the customer paid off the account after 15 days, how much cash would Osato Chemicals Inc. get? I I Approximately 20% of Osato Chemicals Inc.?s customers take advantage of the discount and pay on the 10th day. The remaining 8O% take an average of 35 days to pay off their accounts. What is Osato Chemicals Inc.?s days sales outstanding (DSO), or the average collection period? 34.5 days 30.0 days 36.0 days 24.0 days
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