Problem 8-11 Net credit position [LO1] McGriff Dog Food Company normally takes 27 days to pay for average daily credit purchases of $9,530. Its average daily sales are $10,680, and it collects accounts in 32 days. a. What is its net credit position? b-1. If the firm extends its average payment period from 27 days to 37 days (and all else remains the same), what is the firms new net credit position? (Negative amount should be indicated by a minus sign.) b-2. Has the firm improved its cash flow?
Input variables:
Accounts payable period	27	days
Daily credit purchases	$9,530
Average daily sales	$10,680
Accounts receivable period	32	days
b. New accounts payable period	37	days
Solution and Explanation:
a.
Accounts receivable
Accounts payable
Net credit position
b-1
New accounts payable
New net credit position