McEwan Industries sells on terms of 3 / 1 0 , net 3 5 . Total sales

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Question:

McEwan Industries sells on terms of $3 / 10,$ net $35 .$ Total sales for the year are $ $725, 500$ ; $40 %$ of the customers pay on the $10$ th day and take discounts, while the other $60 %$ pay, on average, $90$ days after their purchases. Assume $365$ days in year for your calculations.

What is the days sales outstanding? Round your answer to two decimal places.

days

What is the average amount of receivables? Do not round intermediate calculations. Round your answer to the nearest cent.

What is the percentage cost of trade credit to customers who take the discount? If your answer is zero, enter zero. Round your answer to two decimal places.

$%$

What is the percentage cost of trade credit to customers who do not take the discount and pay in $90$ days? If your answer is zero, enter zero. Do not round intermediate calculations. Round your answers to two decimal places.

Nominal cost:

$%$

Effective cost:

$%$

What would happen to McEwan $’$ s accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the $35$ th day? Do not round intermediate calculations. Round your answer for DSO to two decimal places and for average receivables to the nearest cent.

Days sales outstanding $($ DSO $)$ :

days

Average receivables: $

Posted Date: May 11, 2024 04:48 AM

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McEwan Industries sells on terms of 3 / 1 0 , net 3 5 . Total sales

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To solve this problem lets break it down step by step 1 Calculate the Days Sales Outstanding DSO DSO Average ReceivablesAverage Daily Credit Sales 2 C... View the full answer

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