A firm offers terms of 225 net 40. currently two-thirds of, Ask an Expert

Accounting

A firm offers terms of 2/25, net 40. Currently, two-thirds of all customers take advantage of the trade discount; the remainder pay bills at the due date.

a. What will be the firm's typical value for its accounts receivable period? (Do not round intermediate calculations.)

b. What is the average investment in accounts receivable if annual sales are $10 million? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

c. What would likely happen to the firm's accounts receivable period if it changed its terms to 3/25, net 40?

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M945237

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - sunshine company purchased equipment for 100000

Question - Sunshine Company purchased equipment for $100,000 in 2012. The machinery originally had an estimated life of 8 years and a salvage value of $10,000. Sunshine used the straight-line depreciation method. In 2016 ...

Problem - pearl co is building a new hockey arena at a cost

Problem - Pearl Co. is building a new hockey arena at a cost of $2,620,000. It received a down payment of $450,000 from local businesses to support the project, and now needs to borrow $2,170,000 to complete the project. ...

Question - lois braggs owns a small restaurant in boston ms

Question - Lois Braggs owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the month of June. The balance in the cash account as of May 3 ...

Question - you would like to purchase a car with a list

Question - You would like to purchase a car with a list price of $30,000, and the dealer offers financing over a five-year period at 8%. If you decide to trade in your current car to help reduce the amount of financing r ...

Question - you are the controller of harmon oil a

Question - You are the Controller of Harmon Oil, a medium-sized oil exploration company in Texas. It is time to make a forecast of the company's annual earnings. You know that additional losses will be recognized before ...

Question the availability of funds effects the capital

Question: The availability of funds effects the capital budgeting decisions. The amount of funds available for capital expenditures will be either limited or unlimited. Funds would be considered unlimited when a firm is ...

Question - flounder corporation sold 3490000 7 5-year bonds

Question - Flounder Corporation sold $3,490,000, 7%, 5-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on January 1. Flounder Corporation uses the straight-line method to amortize bo ...

Question - dividend income susan owns shares of stock in a

Question - Dividend Income. Susan owns shares of stock in a corporation. In January 2018, she received a 1099-DIV reporting the following: Total ordinary dividends $526 Qualified dividends included in total dividends 450 ...

Question each part should be supported with extensive text

Question: Each part should be supported with extensive text explaining and supporting the details of your plan. Part Two - List of financial goals (short, medium, and long-term) ? ?You should have a minimum of 3 for each ...

Question - given2018 pretax accounting income 4000002018

Question - Given 2018 Pretax Accounting Income: $400,000 2018 Municipal Bond Interest Income Included in Pretax Accounting Income: $20,000 2018 Warranty Expense of $70,000 for Accounting Purposes 2018 Actual Warranty Cos ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert