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Please answer all questions and show all calculations. Consider the case of Allied Biscuit Company: Allied Biscuit Company sells on terms of 3/15 net 30.
Please answer all questions and show all calculations.
Consider the case of Allied Biscuit Company: Allied Biscuit Company sells on terms of 3/15 net 30. The company's management is concerned that its investment in accounts receivable is unintentionally growing due to its customers' late payments, called "arrearages." In anticipation of being asked about this by the company treasurer, Ethan collected a sample of accounts receivable information. The sample represents 20% of the company's accounts receivable outstanding. Assist Ethan by organizing the sample data into an aging schedule using the categories shown. Then calculate the volume of accounts receivable outstanding and the percentage of total receivables outstanding in each category in order to complete the statements that follow. An aging schedule provides additional insight into the condition of a firm's accounts receivable. In this case, using the preceding sample data, the percentage of receivables that are 61 - 90 days and 91 + days late are ____ and ____, respectively. This has the potential to be a receivables and working capital management problem for _____ Allied, because it means that the total dollar value for all of its accounts receivable that are more than 60 days late is ____. (Remember, the preceding sample data represents 20% of Allied's total volume of accounts receivable.)
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