2 Kyoto Joe Inc. sells earnings forecasts for Japanese securities. Its credit terms are 4/15, net 90. Based on experience, 60% of all customers will take the discount. a. What is the average collection period for Kyoto Joe? (Use 365 days a year.) Average collection period days b. If Kyoto Joe sells 1,080 forecasts every month at a price of $2,000 each, what is its average balance sheet amount in accounts receivable? Assume 365 days per year. (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Average balance 2$

2 Kyoto Joe Inc. sells earnings forecasts for Japanese securities. Its credit terms are 4/15, net 90. Based on experience, 60% of all customers will take the discount. a. What is the average collection period for Kyoto Joe? (Use 365 days a year.) Average collection period days b. If Kyoto Joe sells 1,080 forecasts every month at a price of $2,000 each, what is its average balance sheet amount in accounts receivable? Assume 365 days per year. (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Average balance 2$

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 6P

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Kyoto Joe, Incorporated, sells earnings forecasts for Japanese securities. Its credit terms are 2/15, net 35. Based on experience, 75 percent of all customers will take the discount. What is the average collection period for the company? If the company sells 2,200 forecasts every month at a price of $900 each, what is its average balance sheet amount in accounts receivable?
Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 1/10, net 50. Based on experience, 75 percent of all customers will take the discount. a. What is the average collection period? Average collection period _________________days b. If the company sells 1,380 forecasts every month at a price of $2,480 each, what is its average daily balance sheet amount in accounts receivable? Average accounts receivable ____________
Kyoto Joe, Incorporated, sells earnings forecasts for Japanese securities. Its credit terms are 3/20, net 40. Based on experience, 70 percent of all customers will take the discount. Assume 365 days per year. What is the average collection period? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. If the company sells 1,370 forecasts every month at a price of $2,470 each, what is its average daily balance sheet amount in accounts receivable? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 3/25, net 50. Based on experience, 80 percent of all customers will take the discount. a. What is the average collection period? (Do not round intermediate calculations and round your answer to 2 decimal places, 32.16.) b. If the company sells 1,340 forecasts every month at a price of $2,440 each, what is its average daily balance sheet amount in accounts receivable? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Salma Corporation sells on terms of net/90. Their accounts receivable are on average 20 days past due. If annual credit sales are P800,000, what is the company’s average investment in accounts receivable? choose the letter of correct answera. P44,444.00b. P144,444.00c. P224,444.00d. P244,444.00e. P344,444.00
choose the letter of the correct answer Log Company’s credit sales are P300,000, and the collection period is 90 days. Cost is 70 percent of selling price. Determine Log's average investment in accounts receivable. a. P32,500.00b. P42,500.00c. P52,500.00d. P62,500.00e. P72,500.00
McDowell Industries sells on terms of 3/10, net 30. All sales for the year are on credit amount to Ksh 912,500,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 40 days after their purchases. a. What is the percentage cost of trade credit to customers who do not take the discount and pay in 40 days? b. What would happen to McDowell’s accounts receivable if it toughened up on its collection policy with the result that all non-discount customers paid on the 30th day?
McEwan Industries sells on terms of 3/10, net 30. Total salesfor the year are $1,921,000; 40% of the customers pay on the 10th day and take discounts,while the other 60% pay, on average, 70 days after their purchases.a. What is the days sales outstanding?b. What is the average amount of receivables?c. What is the percentage cost of trade credit to customers who take the discount?d. What is the percentage cost of trade credit to customers who do not take the discountand pay in 70 days?e. What would happen to McEwan’s accounts receivable if it toughened up on its collectionpolicy with the result that all nondiscount customers paid on the 30th day?
Kirk Development buys on terms of 2/15, net 45 days. It does not take discounts, and it typically pays on time, 45 days after the invoice date. Net purchases amount to $350,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.) a. $43,151 b. $14,384 c. $42,288 d. $14,096 e. $28,767
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Assume the 3-month rate on AAA-rated banker’s acceptance is currently trading at 4% p.a. (per annum). A exporter holding a letter of credit (LC) from a AAA-rated bank with a face value of $1,000,000 wishes to sell it in the market. What price can she expect to receive?
Howes Inc. buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $450,000 per year. On average, what is the dollar amount of costly trade credit (total credit − free credit) the firm receives during the year? (Assume a 365-day year, and note that purchases are net of discounts.)