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McEwan Industries sells on terms of 3/10, net 25. Total sales for the year are $1,044,500; 40% of the customers pay on the 10th day
McEwan Industries sells on terms of 3/10, net 25. Total sales for the year are $1,044,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average 80 days after their purchases. Assume 365 days in year for your calculations . What is the days sales outstanding? Round your answer to two decimal places days b. What is the average amount of receivables? Do not round Intermediate calculations. Round your answer to the nearest cent. c. What is the percentage cost of trade credit to customers who take the discount? If your answer is zero, enter zero. Round your answer to two decimal places d. What is the percentage cost of trade credit to customers who do not take the discount and pay in 80 days? If your answer is zero, enter zero. Do not round intermediate calculations. Round your answers to two decimal places Nominal cost: Effective cost: What would happen to McEwan's accounts receivable it toughened up on its collection policy with the result that all nondiscount customers paid on the 25th day? Do not round intermediate calculation Round your answer for D50 to two decimal places and for average receivables to the nearest cent. Days sales outstanding (DSO): Average receivables: 5
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