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(Click the joon to view more information.) Radical Shirt Company sells on credit and manages its own receivables. Average experience for the past three
(Click the joon to view more information.) Radical Shirt Company sells on credit and manages its own receivables. Average experience for the past three years has been the following (Click the icon to view the data) Requirement 1. Should Radical Shirt Company start accepting credit cards? Show the computations of net income under the present plan and under the credit card plan. (ignore estimated sales returns and refunds for this exercise.) (Assume the same cost of goods sold percentage as the company has experienced in the past. For amounts with a $0 balance, make sure to enter "0" in the appropriate field. In the "Expected with credit card scenario, assume the company is switching completely from receivables to credit card sales and therefore, there will be no expenses related to receivables.) Sales Cost of goods sold Uncollectible-account expense Credit card discount expense Other expenses Total expenses Net income Actual without credit cards Expected with credit cards Decision: Radical Shirt company start accepting credit cards wwww
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