Morrissey Industries sells on terms of 3/10, net 30. Total sales for the year are $900,000. Forty
Question:
Morrissey Industries sells on terms of 3/10, net 30. Total sales for the year are $900,000. Forty percent of the customers pay on Day 10 and take discounts; the other 60 percent pay, on average, 40 days after their purchases.
a. What is the days sales outstanding?
b. What is the average amount of receivables?
c. What would happen to average receivables if Morrissey tightened its collection policy with the result that all current no discount customers paid on Day 30?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 70% (20 reviews)
a DSO 0410 0640 28 days b 900000360 2500 sales per day 250028 70000 Avera...View the full answer
Answered By
Antony Mutonga
I am a professional educator and writer with exceptional skills in assisting bloggers and other specializations that necessitate a fantastic writer. One of the most significant parts of being the best is that I have provided excellent service to a large number of clients. With my exceptional abilities, I have amassed a large number of references, allowing me to continue working as a respected and admired writer. As a skilled content writer, I am also a reputable IT writer with the necessary talents to turn papers into exceptional results.
4.50+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Corporate Finance questions
-
If the actual sales for the year are substantially lower than the sales forecasted at the beginning of the year, what potential valuation problems could arise in the production cycle accounts?
-
If the actual sales for the year are substantially lower than the sales forecast at the beginning of the year, what potential valuation problems may arise in the production cycle accounts?
-
Junker's Stash started the Year 2 accounting period with the balances given in the financial statements model shown below. During Year 2, Junker's Stash experienced the following business events: 1....
-
1.The purpose of using a balanced scorecard is for: Multiple Choice A.companies to make sure their business activities align with strategy. B.companies to compare themselves with their competitors....
-
Describe the basis of goal setting theory and name and describe the characteristics of SMART goals and SMART2 goals. Which of the two set of goals are more applicable in today's organizations?
-
Table 30.10 lists data from the budget of Rite well Publishers. Half the company sales are for cash on the nail; the other half are paid for with a one-month delay. The company pays all its credit...
-
Consider a vapor condensing on a wall and forming a liquid film. Assume that locally the film thickness is related to the flow rate per unit transfer area by momentum-transfer considerations. Then...
-
Snake Golf Club, Corp., had the following stockholders equity at December 31, 2011: On June 30, 2012, Snake split its common stock 2 for 1. Requirements 1. Make the memorandum entry to record the...
-
Portfolio: P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 Stock A 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Stock B 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Beta Required Return BP1 BP2 BP3 BP4 BP5 BP6 BP7...
-
Prairie Insurance sells life insurance, disability insurance, vehicle insurance, crop insurance, and homeowners' insurance. You are employed by Prairie Insurance and have been promoted to sales...
-
Gifts Galore Inc. borrowed $1.5 million from National City Bank (NCB). The loan was made for three months at a simple annual interest rate of 9 percent. A 20 percent compensating balance requirement...
-
Helen Bowers, the new credit manager of the Muscarella Corporation, was alarmed to find that Muscarella sells on credit terms of net 50 days whereas industry-wide credit terms have recently been...
-
In light of your answer to Problem 30.36, explain why a mixture of products occurs in the followingreaction: CH 190 C CH
-
What is your holding period return on a combined purchase of a stock for $115 and a put option on that stock with strike price of $110 for a premium of 6 if the stock price at the expiration of the...
-
Explain the measures to prevent contractual disputes.
-
Hillard Company is currently considering how much should be charged for one unit of Product SR10. The president of Hillard Company has decided to use the cost-plus approach to product pricing and has...
-
Why does FASB make things so complicated? Couldn't there just be one method for accounting for investments in other companies rather than three?
-
Choice #2 The term "reasonable" is used quite frequently in the Canadian legal System. Discuss how this term is used throughout Canadian Law in the following areas: A) The Canadian Charter of Rights...
-
If there is forwarding, for the first five cycles during the execution of this code, specify which signals are asserted in each cycle by hazard detection and forwarding units in Figure 4.60. This...
-
1A. If the researcher is concerned about the number of variables, the nature of the analysis, and completion rates, then, he/she is at which stage of the sampling design process (Figure 11.1 in the...
-
a. Find the Laplace transform of the given function. Use Table 2.2 when applicable. b. Confirm the result of (a) in MATLAB. \(t \cosh t\) TABLE 2.2 Laplace Transform Pairs No. f(t) F(s) 1 Unit...
-
Llama Wool Company is trying to do some financial planning for the coming year. Llama plans to raise $10,000 in new equity this year and wants to pay a dividend to stockholders of $30,000 in total....
-
You are the CFO of a large publicly-traded company. You would like to convey positive information about the firm to the market. If you intuitively understand (and agree with) the results from the...
-
You are the CFO of a public company that advises distressed companies about how to manage their businesses in a recessionary environment. Your company has been performing extremely well since the...
-
Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $36.44 per share. She expects the price of the stock to rise to $43.62 over the next 3 years. During that time she also...
-
At the beginning of the week, Taylan's restaurant had a beginning inventory of food and beverages totaling $4,000. During the week, additional food and beverages purchases totaled $3,000. At the end...
-
1. Identify the auditor's role in the internal and external auditing processes. 2. Identify one law, regulation, and statue affecting healthcare
Study smarter with the SolutionInn App