The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit

Question:

The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows:image text in transcribed

Throughout this entire period, the firm’s credit customers maintained a constant payments pattern: 20% paid in the month of sale, 30% paid in the first month following the sale, and 50% paid in the second month following the sale.

a. What was Fogler’s receivables balance at the end of March and at the end of June?

b. Assume 90 days per calendar quarter. What were the average daily sales (ADS) and days sales outstanding (DSO) for the first quarter and for the second quarter? What were the cumulative ADS and DSO for the first half-year?

c. Construct an aging schedule as of June 30. Use account ages of 0–30, 31–60, and 61–90 days.

d. Construct the uncollected balances schedule for the second quarter as of June 30.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Financial Management

ISBN: 9781337395083

13th Edition

Authors: Eugene F. Brigham, Phillip R. Daves

Question Posted: