first drop down:credit termscredit standardscollection policy Second drop down:35.5437.6341.8129.27 Third drop down:53,326,75950,520,08761,746,77356,133,430 Effective credit management involves establishing credit standards for extending credit to customers, determining the company's credit terms, andsetting up procedures for invoicing and collecting past-due accounts.The following statement refers to a credit management policy. Select the best term to complete the sentence.The minimum financial strength a customer must have to be granted credit is indicated by the company'sConsider the case of Wok Bar Co.:Wok Bar Co.'s CFO has decided to take a closer look at the company's credit policy. Wok Bar Co. has annual sales of $396.3 million, andit currently has an accounts receivable balance of $45.4 million. The first step in analyzing the firm's credit policy is to determine itsdays sales outstanding (DSO).(Note: Use 365 days as the length of a year in all calculations.)The average DSO for Wok Bar Co.'s industry is 51.7 days. Assuming that its sales stayed the same, what would be Wok Bar Co.'s receivables balance ifit maintained the industry average DSO?Based on this information, Wok Bar Co.'s DSO isWok Bar Co.'s CFO thinks that the company has not done a very good job of enforcing its credit policy. The CFO believes that if the company were tobetter enforce its credit policy, it would reduce its DSO to 30 days; however, this will cause Wok Bar Co. to lose 6% of its sales revenue. What wouldWok Bar Co.'s expected accounts receivables balance be if it decides to tighten its credit policy?$32,149,152O $26,025,504O $33,680,064O $30,618,2404

Credit management refers to the practices and strategies employed by companies to effectively manage…

(Note: Use 365 days as the length of a year in all calculations.) The average DSO for Wok Bar Co.'s industry is 51.7 days. Assuming that its sales stayed the same, what would be Wok Bar Co.'s receivables balance if it maintained the industry average DS07 Based on this information, Wok Bar Co.'s DSO is Wok Bar Co.'s CFO thinks that the company has not done a very good job of enforcing its credit policy. The CFO believes that if the company were to better enforce its credit policy, it would reduce its DSO to 30 days; however, this will cause Wok Bar Co. to lose 6% of its sales revenue. What would Wok Bar Co.'s expected accounts receivables balance be if it decides to tighten its credit policy? O $32,149,152 O $26,025,504 O $33,680,064 O $30,618,240

(Note: Use 365 days as the length of a year in all calculations.) The average DSO for Wok Bar Co.'s industry is 51.7 days. Assuming that its sales stayed the same, what would be Wok Bar Co.'s receivables balance if it maintained the industry average DS07 Based on this information, Wok Bar Co.'s DSO is Wok Bar Co.'s CFO thinks that the company has not done a very good job of enforcing its credit policy. The CFO believes that if the company were to better enforce its credit policy, it would reduce its DSO to 30 days; however, this will cause Wok Bar Co. to lose 6% of its sales revenue. What would Wok Bar Co.'s expected accounts receivables balance be if it decides to tighten its credit policy? O $32,149,152 O $26,025,504 O $33,680,064 O $30,618,240

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.4DC

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Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. How a company handles its credit accounts, including methods of invoicing and collecting past-due accounts, is indicated by the company’s . Consider the case of Three Waters Co.: Three Waters Co.’s CFO has decided to take a closer look at the company’s credit policy. Three Waters Co. has annual sales of $384.4 million, and it currently has an accounts receivable balance of $45.4 million. The first step in analyzing the firm’s credit policy is to determine its days sales outstanding (DSO). Based on this information, Three Waters Co.’s DSO is . (Note: Use 365 days as the length of a year in all calculations.) The average DSO for Three…
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Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company’s . Consider the case of Universal Exports Inc.: Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 1/10, net 30. If a customer bought $150,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $157,500 $148,500 $120,000 $127,500 If the customer paid off the account after 15 days, Universal…
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