Roton Inc. purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $525,000 per year. What is the maximum dollar amount of costly trade credit the firm could get, assuming it abides by the supplier's credit terms? (Assume a 365-day year.) Do not round intermediate calculations. Select one:

Q: Zane Corporation has an inventory conversion period of 48 days, an average collection period of 33…

A: It is given thatInventory conversion period is 48 days.Average collection period is 33 days.Payables…

Q: Kumi Ltd permits its customers to pay with a credit card or to receive a percentage discount ? for…

A: Given:

Q: FP Co. buys on terms 2/10, net 30, but generally does not pay until the 40 days after invoice date.…

A: Given Information: Total purchases         P2,160,000 Buying terms 2/10, net 30

Q: 7. Howes Inc. purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: What is the average accounts payable for APP?

A: Accounting:   Accounting is the art of recording, classifying and summarizing in a significant…

Q: On average, how much “free” trade credit does the firm receive during the year?

A: Free trade credit refers to the payment made by a firm within the discount period whereas when the…

Q: Lily Corp. Corp. sells on term 2/20, net 40. Total credit sale for the year are P180,000. 40% pays…

A: Accounts receivables refer to the legal claims or money a company will get after the customer pays…

Q: GFB Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…

A: Free Trade credit refers to a type of financing wherein the buyer gets a credit period of…

Q: JFP Co. buys on terms 2/10, net 30 but generally does not pay until the 40 days after invoice date.…

A: Accounts payable means those accounts from whom business has made credit purchases on account.

Q: Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Accounts payables are the liabilities which arises due to credit purchases from the suppliers. The…

Q: PPG Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…

A: Credit financing is a type of financing in which a purchase is made on credit, that is, the purchase…

Q: d be employed. Only one proposal has so far been put forward concerning the management of trade…

A: 1. Credit policies are critical documents for nearly every organization, but especially for those…

Q: Snider Industries sells on terms of 2/10, net 45. Total sales for the year are$1,500,000. Thirty…

A: Part (a): Calculation of days' sales outstanding: Answer: Average amount of receivables is 38 days

Q: A company buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 35…

A: Nominal Annual Cost = Discount percent(100-Discount percent) × 365 daysTotal Pay period - Discount…

Q: In 2015, XYZ Corp. had an annual cost of goods sold of $365 million. XYZ’s average accounts…

A: Answer: Option . No, because they are paying their suppliers too earlyExplanation.Days Purchase…

Q: Newsome Inc. buys on terms of 3/15, net 45. It does not take the discount, and it generally pays…

A: Nominal annual percentage cost=[Discount rate / (100-Discounting rate ) * [365 /(Total days to pay -…

Q: Howes Inc. buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on…

A: Costly Trade credit= Total credit - free trade credit Purchase daily = Total purchase / number of…

Q: The change in the credit policy would result to increase (decrease) in incremental profit of (Use…

A: The increase in incremental profit is when the total benefit derived from credit policy is higher…

Q: AL Enterprises purchases P4,562,500 in goods per year from its sole supplier on terms of 2/15, net…

A: Discount rate = 0.02 (i.e. 2%) Allowed payment days = 50 Discount days = 15

Q: McDowell Industries sells on terms of 3/10, net 30. All sales for the year are on credit amount to…

A: a) Computation of trade credit who do not take the discount and pay in 40 days is as follows:Nominal…

Q: Newsome Inc. buys on terms of 4/10, net 45. It does not take the discount, and it generally pays…

A: Effective annual percentage = (1+[Discount rate/(1–Discount Rate)])^n– 1 Where n= No. of days in a…

Q: Kirk Development buys on terms of 2/15, net 60 days.  It does not take discounts, and it typically…

A: The calculation is:

Q: One company has net sales of $462,000 for the year, and it estimates uncollectible accounts will be…

A: Allowance for doubtful accounts normally have credit balance.  It represent the amount of accounts…

Q: Peanut Inc. is evaluating whether to change its credit terms from 2/10 net 30 to 3/10 net 30. At…

A: Account receivables (AR) is current assets (CA) for the firm. To make effective collections and…

Q: Zane Corporation has an inventory conversion period of 79 days, an average collection period of 43…

A: Calculate the cash conversion cycle as follows: Cash conversion cycle = Inventory  period +…

Q: The following projections have been made by Orange Traders for the period ending 31 March 2022: 1.…

A: Cash Budget: It  is the  estimation of  cash inflows and outflows  of a business to measure  whether…

Q: If a firm buys under terms of 1/15, net 60, but actually pays on the 20th day and still takes the…

A: If a customer pays the amounts due on his purchase within a certain time period, he may receive a…

Q: Newsome inc. buys on terms of 3/15, net 45. It does not take the discount, and it generally pays…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: In 2015, XYZ Corp. had an annual cost of goods sold of $365 million. XYZ's average accounts…

A: Answer: Option . No, because they are paying their suppliers too early. Explanation.Days Purchase…

Q: nider Industries sells on terms of 2/10, net 25. Total sales for the year are $600,000. Thirty…

A: Days Sales Outstanding means the number of days taken by the firm to collect the payment from their…

Q: nider Industries sells on terms of 2/10, net 35. Total sales for the year are $600,000. Thirty…

A: Days sales outstanding means the average number of days , a customer take , to make payment. This…

Q: Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Net purchases = P450,000 Terms of credit = 2/15,net 60 days

Q: Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Accounts payable: Accounts payable are the liabilities which arises due to credit purchases from the…

Q: BayFish Company currently uses maximum trade credit by not taking discounts on its purchases.…

A: If the firm plans to use trade discount. Then firm should borrow notes. $10000 per day borrow. And…

Q: Milton Company provides this information for the month of November, 2008: sales on credit P150,000;…

A: Formula: Net sales = Cash sales + Credit sales - Sales discount - Sales returns and allowances

Q: FP Co. buys on terms 2/10, net 30, but generally does not pay until the 40 days after invoice date.…

A: Trade credit means purchasing of trade goods on credit basis. If there is any discount period, then…

Q: International Industries sells on terms of 3/10, net 50. Gross sales last year were 5,662,500 and…

A: Given information: Credit terms 3/10, net 50 Last year gross sales amounted to $5,662,500 Average…

Q: Calla Lily Corp. purchases on terms of 2/8, net 45 days, does not accept discounts, and pays after…

A: Time = 45 days Terms = 2/8 Pay after A = 58 days Year y = 365 days

Q: McGriff Dog Food Company normally takes 28 days to pay for average daily credit purchases of $9,540.…

A: The firms usually operate on a credit basis, which means that they pay for their purchases later,…

Q: ABC Corp. has net credit sales of P1,440,000 yearly with credit terms of n/30, which is also the…

A: Formula: Accounts receivable turnover = Net credit sales / Average accounts receivable Average…

Q: nternational Industries sells on terms of 3/10, net 50. Gross sales last year were 5,662,500 and…

A: The calculation of gross and discounted sales has been made as follows: Gross Sales per day =Total…

Q: If Vabasa, Inc. has an average collection period (ACP) of 52.5 days (assume a 360 day year) and…

A: Average Collection Period helps to know the trend of collection of dues. The formula of Average…

Q: Assume that ABC Corporation pays for each purchase three (3) weeks after date of purchase. Maintains…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Credit terms indicate the percentage discount a firm can take off the invoice amount if payments…

Q: A large retailer obtains merchandise under the credit terms of 2/15, net 30, but routinely takes 50…

A: Given: credit terms of 2/15, net 30 Days take to pay bills = 50 days Number of days in a years = 365…

Q: me the financial difficulties, it is considering to change the credit policy. The proposed terms of…

A: Fixed costs refer to the expenses which remain the same while producing a lot of products…

Q: Heller Company offers an unconditional return policy to its customers. During the current period,…

A: The net sales is the actually sales that has taken place by the organization after deducting all the…

Q: Why is some trade credit called free while other credit is called costly? If a firm buys on terms of…

A: Trade credit is a form of debt which is arise from selling goods on credit. It is reflected in…

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.