The following information was drawn from the accounting records of Hedges and Latour.

Required
a. Determine the average number of days to collect accounts receivable for each company.
b. Which company is likely to incur more costs associated with extending credit?
c. Identify and discuss some of the costs associated with extending credit.
d. Explain why a company would be willing to accept the costs of extending credit to itscustomers.

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Account Title Hedges Latour Accounts receivable (year end) 80,000 Sales on account 50,000 450,000 920,000