A firm has $400,000 in credit sales and $100,000 in accounts receivable. Compute accounts receivable turnover and average number of collection days. How do these numbers relate to the terms of 2/10 net/30?
Answer to relevant QuestionsIf Larry in exercise 5 has accounts receivable of $100,000 rather than $60,000: a. What is Larry’s accounts receivable turnover? b. What is Larry’s average collection period? c. What should Larry do, if anything? What is the relationship between the time value of money and inflation? If inflation averages 4 percent per year, how much purchasing power will $1.00 lose in ten years? Joe Jones went to his bank to find out how long it will take for $1,000 to amount to $1,350 at 9 percent simple interest. Solve Joe's problem. You deposit $760 in an account one time that compounds monthly at 2 percent. How much will you have in your account at the end of ten years?
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