Problemsnider industries sells on term of 210 net 45 total, Ask an Expert

Accounting

Problem:

Snider Industries sells on term of 2/10, net 45. Total sales for the year are $1,500,000. Thirty percent of customers pay on the 10th day and take discounts: the other 70% pay, on average, 50 days after their purchases.

Required:

Question 1: What is the days sales outstanding?

Question 2: What is the average amount of receivables?

Question 3: What would happen to average receivables if Snider toughened its collection policy with the result that all non-discount customers paid on the 45th day.

Note: Please provide reasons to support your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170935

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