Morrissey Industries sells on terms of 3/10, net 30. Total sales for the year are $900,000. Forty
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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?
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a DSO 0410 0640 28 days b 900000360 2500 sales per day 250028 70000 Avera...View the full answer
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