Receivables Investment Snider Industries sells on terms of 3/10, net 40. Total s
ID: 2729636 • Letter: R
Question
Receivables Investment
Snider Industries sells on terms of 3/10, net 40. Total sales for the year are $1,510,500. Thirty percent of the customers pay on the 10th day and take discounts; the other 70% pay, on average, 58 days after their purchases. Assume 365 days in year for your calculations.
What is the days sales outstanding? ___ days
What is the average amount of receivables?___$
What would happen to average receivables if Snider toughened up on its collection policy with the result that all nondiscount customers paid on the 40th day?___$
Explanation / Answer
Snider Industries All Amounts in $ Total Sales for the year 1510500 Receivables 30% collected on 10th day @ 3% discount 439556 Balance 70% collected after 58 days 168017 Total Receivables 607573 Average Receivables 303786 Days Sales Outstanding 73.41 days Receivables owing to change in credit policy 30% collected on 10th day @ 3% discount 439556 Balance 70% collected after 58 days 115874 Total Receivables 555429 Average Receivables 277715
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.