Question
Route Canal Shipping Company has the following schedule for aging of accounts receivable: Age of Receivables April 30, 20X1 (1) (2) (3) (4) Month of
Route Canal Shipping Company has the following schedule for aging of accounts receivable:
Age of Receivables April 30, 20X1 (1) (2) (3) (4) Month of Sales Age of Account Amounts Percent of Amount Due April 030 $ 156,240 _______ March 3160 78,120 _______ February 6190 117,180 _______ January 91120 39,060 _______ Total receivables $ 390,600 100%
a. Calculate the percentage of amount due for each month.
b. If the firm had $1,512,000 in credit sales over the four-month period, compute the average collection period. Average daily credit sales should be based on a 120-day period.
Average Collection period=
c. If the firm likes to see its bills collected in 36 days, should it be satisfied with the average collection period?
multiple choice 1 Yes No
d. Disregarding your answer to part c and considering the aging schedule for accounts receivable, should the company be satisfied?
multiple choice 2 Yes No
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