Marjoha Company sells on terms of 3/10, net 30. Gross sales for the year are P1,200,000 and the collections department estimates that 30 percent of the customers pay on the tenth day and take discounts; 40 percent pay on the thirtieth day; and the remaining 30 percent pay, on average, 40 days after the purchase. Assume 360 days per year.
Marjoha Company sells on terms of 3/10, net 30. Gross sales for the year are P1,200,000 and the collections department estimates that 30 percent of the customers pay on the tenth day and take discounts; 40 percent pay on the thirtieth day; and the remaining 30 percent pay, on average, 40 days after the purchase. Assume 360 days per year.
Chapter15: Managing Short-term Assets
Section: Chapter Questions
Problem 12PROB
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Marjoha Company sells on terms of 3/10, net 30. Gross sales for the year are P1,200,000 and the collections department estimates that 30 percent of the customers pay on the tenth day and take discounts; 40 percent pay on the thirtieth day; and the remaining 30 percent pay, on average, 40 days after the purchase. Assume 360 days per year. What is the average collection period?
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