Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

McEwan Industries sells on terms of 3/10, net 40. Total sales for the year are $1,735,500; 40% of the customers pay on the 10th day

image text in transcribed
McEwan Industries sells on terms of 3/10, net 40. Total sales for the year are $1,735,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 82 days after their purchases. Assume 365 days in year for your calculations. a. What is the days sales outstanding Round your answer to two decimal places days b. What is the average amount of recevables? Do not round intermediate calculations, Round your answer to the nearest cont. c. What is the perceritage 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 2 days? If your answer is zero, enter zero. Do not found Intermediate calculations. Round your answers to two decimal places. Nominal cost: Effective cost: 96 e. What would happen to wain's accounts receivable if it toughened up on its collection policy with the result that all nandiscount customers paid on the 40th day? Do not round Intermediate calculations. Round your answer for DSO to two decimal places and for average recolvables to the nearest cent Das soles outstanding (OS) days Average receivables

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Options Trading For Beginners

Authors: Mike Hartley

1st Edition

979-8864514832

More Books

Students also viewed these Finance questions

Question

Determine when self-disclosure is appropriate and when it is not.

Answered: 1 week ago