Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit te
ID: 2707853 • Letter: K
Question
Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 2.5/15, net 90. Based on experience, 60 percent of all customers will take the discount.
If Kyoto Joe sells 1,400 forecasts every month at a price of $2,075 each, what is its average balance sheet amount in accounts receivable? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
a. What is the average collection period for Kyoto Joe? (Use 365 days a year.)Explanation / Answer
Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 2.5/15, net 90. Based on experience, 60 percent of all customers will take the discount.
If Kyoto Joe sells 1,400 forecasts every month at a price of $2,075 each, what is its average balance sheet amount in accounts receivable? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
a. What is the average collection period for Kyoto Joe? (Use 365 days a year.)average collection period = 15*60% + 90*40% = 45
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