Question

McEwan Industries sells on terms of 3/10, net 35. Total sales
for the year are $1,461,000; 40% of the customers pay on the
10^{th} day and take discounts, while the other 60% pay, on
average, 50 days after their purchases. Assume 365 days in year for
your calculations.

- What is the days sales outstanding? Round your answer to two
decimal places.

days - What is the average amount of receivables? Round your answer to
the nearest cent. Do not round intermediate calculations.

$ - What is the percentage cost of trade credit to customers who
take the discount? Round your answers to two decimal places.

% - What is the percentage cost of trade credit to customers who do
not take the discount and pay in 50 days? Round your answers to two
decimal places. Do not round intermediate calculations.
Nominal cost: % Effective cost: % - What would happen to McEwan’s accounts receivable if it
toughened up on its collection policy with the result that all
nondiscount customers paid on the 35
^{th}day? Round your answers to two decimal places. Do not round intermediate calculations.

Days sales outstanding (DSO) = days

Average receivables = $

Answer #1

a. No of days sales outstanding = (40% * 10days) + (60% * 50 days) = 34 days

b. Average receivables = (Sales / Total no of days) * No of sales days outstanding = ($1,461,000 / 365) *34 = $136,093.15

c. Percentage of cost = 3/ 97 * 365/ 25 = 45.15% [ 25 days is the time to pay without availing discount from the 10th day]

d. Nominal Cost = 3/ 97 * 365/ 40 = 28.22%

Effective cost = (1+3/97) 365/40 -1 = 32.04%

e.

No of days sales outstanding = (40% * 10days) + (60% * 35 days) = 25 days

Average receivables = (Sales / Total no of days) * No of sales days outstanding = ($1,461,000 / 365) *25 = 100,068.49

McEwan Industries sells on terms of 3/10, net 40. Total sales
for the year are $1,775,000; 40% of the customers pay on the
10th day and take discounts, while the other 60% pay, on
average, 52 days after their purchases. Assume 365 days in year for
your calculations.
What is the days sales outstanding? Round your answer to two
decimal places.
days
What is the average amount of receivables? Round your answer to
the nearest cent. Do not round intermediate...

McEwan Industries sells on terms of 3/10, net 25. Total sales
for the year are $746,500; 40% of the customers pay on the
10th day and take discounts, while the other 60% pay, on
average, 52 days after their purchases. Assume 365 days in year for
your calculations.
What is the days sales outstanding? Round your answer to two
decimal places.
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What is the average amount of receivables? Round your answer to
the nearest cent. Do not round intermediate...

McEwan Industries sells on terms of 3/10, net 40. Total sales
for the year are $1,870,500; 40% of the customers pay on the
10th day and take discounts, while the other 60% pay, on
average, 82 days after their purchases. Assume 365 days in year for
your calculations.
What is the days sales outstanding? Round your answer to two
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What is the average amount of receivables? Round your answer to
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calculations....

McEwan Industries sells on terms of 3/10, net 30. Total sales
for the year are $1,326,00; 40% of the customers pay on the 10th
day and take discounts, while the other 60% pay, on average, 82
days after their purchases. Assume 365 days in a year for your
calculations.
d. What is the percentage cost of trade credit to customers who
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Nominal cost %
Effective cost %
e. what would...

Receivables Investment
Snider Industries sells on terms of 2/10, net 35. Total sales
for the year are $600,000. Thirty percent of customers pay on the
10th day and take discounts; the other 70% pay, on average, 40 days
after their purchases. Assume a 365-day year.
What is the days sales outstanding? Do not round intermediate
calculations. Round your answer to the nearest whole number.
days
What is the average amount of receivables? Do not round
intermediate calculations. Round your answer...

Problem 16-06
Receivables Investment
Snider Industries sells on terms of 3/10, net 35. Total sales
for the year are $1,660,000. Thirty percent of customers pay on the
10th day and take discounts; the other 70% pay, on average, 40 days
after their purchases. Assume 365 days in year for your
calculations.
What is the days sales outstanding? Round your answer to one
decimal place.
days
What is the average amount of receivables? Round your answer to
the nearest dollar. Do...

Problem 16-06
Receivables Investment
Snider Industries sells on terms of 3/10, net 35. Total sales
for the year are $960,000. Thirty percent of customers pay on the
10th day and take discounts; the other 70% pay, on average, 40 days
after their purchases. Assume 365 days in year for your
calculations.
What is the days sales outstanding? Round your answer to one
decimal place.
days
What is the average amount of receivables? Round your answer to
the nearest dollar. Do...

Snider Industries sells on terms of 3/10, net 35. Total sales
for the year are $1,902,500. Thirty percent of the customers pay on
the 10th day and take discounts; the other 70% pay, on average, 54
days after their purchases. Assume 365 days in year for your
calculations.
A) What is the days sales outstanding? Round your answer to one
decimal place.
B) What is the average amount of receivables? Round your answer
to the nearest dollar.
C) What would...

Receivables Investment
Snider Industries sells on terms of 3/10, net 25. Total sales
for the year are $990,000. Thirty percent of customers pay on the
10th day and take discounts; the other 70% pay, on average, 30 days
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What is the days sales outstanding? Round your answer to one
decimal place. _____ days
What is the average amount of receivables? Round your answer to
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Snider Industries sells on terms of 2/10, net 35. Total sales
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What would happen to average receivables if Snider toughened its
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paid on the 35th day? Do not round intermediate calculations. Round
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