FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
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Textbook Question
Chapter 7, Problem 22P
Problems 22-25 are a series and should be completed in order.
Dome Metals has credit sales of
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Dome Metals has credit sales of $342,000 yearly with credit terms of net 45 days, which is also the average collection period. Dome does not offer a discount for early payment, so its customers take the full 45 days to pay. a. What is the average receivables balance? (Use a 360-day year.)b. What is the receivables turnover? (Use a 360-day year.)
ABC Corp. has net credit sales of P1,440,000 yearly with credit terms of n/30, which is also the average collection period. BECK does not offer discounts for early payment; thus, customers take the full 30 days to pay. (Use 360 days/year)
1.What is the average receivable balance?
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1. Medwing Corporation has a DSO of 19 days. The company averages 5,500 in credit sales each day. What is the company’s average accounts receivable?
Chapter 7 Solutions
FOUND.OF FINANCIAL MANAGEMENT-ACCESS
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Why would a financial manager want to slow down...Ch. 7 - Use The Wall Street Journal or some other...Ch. 7 - Why are Treasury bills a favorite place for...Ch. 7 - Explain why the bad debt percentage or any other...Ch. 7 - What are three quantitative measures that can be...Ch. 7 - Prob. 8DQCh. 7 - What does the EOQ formula tell us? What assumption...Ch. 7 - Why might a firm keep a safety stock? What effect...
Ch. 7 - If a firm uses a just-in-time inventory system,...Ch. 7 - City Farm Insurance has collection centers across...Ch. 7 - Prob. 2PCh. 7 - Orbital Communications has operating plants in...Ch. 7 - Postal Express has outlets throughout the world....Ch. 7 - Thompson Wood Products has credit sales of...Ch. 7 - Oral Roberts Dental Supplies has annual sales of...Ch. 7 - Knight Roundtable Co. has annual credit sales of...Ch. 7 - Darla’s Cosmetics has annual credit sales of...Ch. 7 - Barney’s Antique Shop has annual credit sales of...Ch. 7 - Mervyn’s Fine Fashions has an average collection...Ch. 7 - Route Canal Shipping Company has the following...Ch. 7 - Nowlin Pipe & Steel has projected sales of 72,000...Ch. 7 - Fisk Corporation is trying to improve its...Ch. 7 - Prob. 14PCh. 7 - Diagnostic Supplies has expected sales of 84,100...Ch. 7 - Wisconsin Snowmobile Corp. is considering a switch...Ch. 7 - Johnson Electronics is considering extending trade...Ch. 7 - Henderson Office Supply is considering a more...Ch. 7 - Fast Turnstiles Co. is evaluating the extension of...Ch. 7 - Slow Roll Drum Co. is evaluating the extension of...Ch. 7 - Global Services is considering a promotional...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...
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- Maddox Resources has credit sales of $198.000 yearly with credit terms of net 30 days, which is also the average collection period. Maddox does not offer a discount for early payment, so its customers take the full 30 days to pay. (Use 365 days in a year.) a-1. What is the average receivables balance? (Do not round Intermediate calculations. Round the final answer to nearest whole dollar.) Accounts receivable balance Receivables turnover a-2. What is the receivables turnover? (Round the final answer to 2 decimal places.) New receivable balance $ 16274 b. If Maddox offered a 2 percent discount for payment in 10 days and every customer took advantage of the new terms, what would the new average receivables balance be? Use the full sales of $198.000 for your calculation of receivables. (Do not round Intermediate calculations. Round the floal answer to nearest whole dollar.) Net Change X $ 2658 Yes No 3 c-1. If Maddox reduces its bank loans, which cost 12 percent, by the cash generated…arrow_forwardRobie Co. operates 365 days in a year. Its receivable on the average remain uncollected for 73 days. Credit sales are P274,200. What is the average receivable?arrow_forwardMr. Rich Mann, is the credit manager of MCC Inc. Mr. Mann would like to estimate the cost of credit sales. From experience, credit customers have paid their bills in an average of 40 days and a standard deviation of 12 days. Customers who pay their bills in 10 days receive a 2% discount. Accounts that are not paid within 75 days are written off as bad debts. (Assume a normal distribution) a. What percentage of accounts is within 25 and 60 days old? b. What percentage of the accounts is written off as bad debts or receives the discount For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS E E A v 、工%ロ启 Q Paragraph Arial 10pt ...arrow_forward
- Problems: (A) Understanding Receivables: ABC sells on credit terms of 2/10, n/30. Daily sales average 200 units at P2,500 each throughout the 365-day year. All sales are on credit. On average, 40% take the cash discount by paying on tenth day while the remaining 60% pay on the 30th day. It is planning to change the credit terms to 2/10, n/25. If this change was done, daily sales will be 180 units. Around 45% will pay on the tenth day while the remaining 55% will pay on the 25n day. 1. What is the original average accounts receivable balance based on the given? 2. What is the original average collection period of the receivables in days? 3. What is the original receivable turnover? Round off to two decimal places.arrow_forwardProblems:(A) Understanding Receivables:ABC sells on credit terms of 2/10, n/30. Daily sales average 200 units at P2,500 each throughout the 365-day year. All salesare on credit. On average, 40% take the cash discount by paying on tenth day while the remaining 60% pay on the 30th day.It is planning to change the credit terms to 2/10, n/25. If this change was done, daily sales will be 180 units. Around 45% willpay on the tenth day while the remaining 55% will pay on the 25th day.1. What is the original average accounts receivable balance based on the given?2. What is the original average collection period of the receivables in days?3. What is the original receivable turnover? Round off to two decimal places.4. What will be the new average accounts receivable balance based on the given?5. What will be the new average collection period of the receivables in days?6. What will be the new receivable turnover? Round off to two decimal places. (B) Receivables: Credit Terms: ABC sold boxes of…arrow_forwardABCD Corporation has credit sales of $10,640,000 and receivables of $1,520,000. a. What is the receivables turnover?b. What is the average collection period (days sales outstanding)?c. If the company offers credit terms of 30 days, are its receivables past due?arrow_forward
- Jaxon Markets currently has credit terms of net 30, an average collection period of 29 days, and average receivables of $211,410. The firm estimates that if it offered terms of 2/10, net 30 that 45 percent of its customers would pay on day 10 with the remainder paying on average in 32 days. How much cash could the company free up from its accounts receivables if it switched its credit policy?arrow_forwardABCD Corporation has credit sales of $10,290,000 and receivables of $1,560,000. Assume there are 365 days in a year. What is the receivables turnover? Round your answer to two decimal places. What is the average collection period (days sales outstanding)? Round your answer to the nearest whole number. days If the company offers credit terms of 45 days, are its receivables past due? Round your answer to the nearest whole number. Enter zero if the receivables are not past due. , it is days overdue.arrow_forwardtrout lumber Yard has a current accounts receivable balance of $442016. Credit sales for the year just ended were $9358610 a. What is the receivables turnover? b. What is the day's receivables? c. How long did it take on average for credit customers to pay off their accounts during the past year? a. Receivables turnover _____ times b. Days sales in receivables ____ days c. Average collection period_____ daysarrow_forward
- ABCD Corporation has credit sales of $10,960,000 and receivables of $1,260,000. Assume there are 365 days in a year. What is the receivables turnover? Round your answer to two decimal places. What is the average collection period (days sales outstanding)? Round your answer to the nearest whole number. days If the company offers credit terms of 30 days, are its receivables past due? Round your answer to the nearest whole number. Enter zero if the receivables are not past due. -Select-YesNoItem 3 , it is days overdue.arrow_forwardc) McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty percent of customers pay on the 15th day and take discounts; the other 70% pay, on average, 60 days after their purchases.a. What is the days sales outstanding?b. What is the average amount of receivables?c. What would happen to average receivables if McDowell toughened its collection policy with the result that all non-discount customers paid on the 40th day?arrow_forwardSway Tailors currently has credit terms of net 30, an average collection period of 29 days, and average receivables of $211,410. The firm estimates that if it offered terms of 2/10, net 30 that 45 percent of its customers would pay on Day 10 with the remainder paying on average in 32 days. How much cash could the company free up from its accounts receivables if it switched its credit policy? Multiple Choice O $65,009 O $38,762 $58,336 ↓yarrow_forward
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