Aggarwal Inc. buys on terms of 2/10, net 30, and it always pays on the 30th day. The CFO calculates that the average amount of costly trade credit carried is $350,000. What is the firm's average accounts payable balance? Assume a 365-day year. Please explain process and show calculations
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Aggarwal Inc. buys on terms of 2/10, net 30, and it always pays on the 30th day. The CFO calculates that the average amount of costly trade credit carried is $350,000. What is the firm's average accounts payable balance? Assume a 365-day year.
Please explain process and show calculations.
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- Suppose that Dunn Industries has annual sales of $2.3 million, cost of goods sold of $1,650,000, average inventories of $1,116,000, and average accounts receivable of $750,000. Assume that all of Dunn’s sales are on credit.What will be the firm’s operating cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)If a firm has sales of $25,689,00 a year, and the average collection period for the industry is 45 days, what should this firm's accounts receivable be in the firm is comparable to the industry?The Dire Corporation has an inventory conversion period of 75 days, a receivables collection period of 38 days, and a payables deferral period of 30 days. What is the length of the firm’s cash conversion cycle? If Dire’s annual sales are $3,421,875 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Dire turn over its inventory?
- Hinkle Corporation buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to $550,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.) a. $94,932 b. $109,895 c. $90,411 d. $104,662 e. $99,6782) Medwig Corporation has a DSO of 18 days. The company averages $3,000 in sales each day (all customers take credit). What is the company's average accounts receivable? Assume a 365-day year. Round your answer to the nearest dollar. $Medwig Corporation has a DSO of 24 days. The company averages $7, 750 in sales each day ( all customers take credit). What is the company's average accounts receivable? Assume a 365 day year. Round your answer to the nearest dollar. $
- Kirk Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to $750,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.)Cainhurst Inc. had sales last year totaling $530,000, and its year-end Accounts Receivable were $62,750. The firm sells on terms that call for customers to pay within 30 days after the purchase, but some customers delay payment beyond this deadline (meaning they pay late). On average, how many days LATE do customers pay? Base your answer on a 365-day year when calculating the DSO.Kirk Development buys on terms of 2/15, net 45 days. It does not take discounts, and it typically pays on time, 45 days after the invoice date. Net purchases amount to $350,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.) a. $43,151 b. $14,384 c. $42,288 d. $14,096 e. $28,767
- еВook Zane Corporation has an inventory conversion period of 90 days, an average collection period of 34 days, and a payables deferral period of 48 days. Assume 365 days in year for your calculations. a. What is the length of the cash conversion cycle? Round your answer to two decimal places. days b. If Zane's annual sales are $3,454,540 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. $ c. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.Your company has been offered credit terms on its purchases of 4/30, net 90days. What will be the nominal annual cost of trade credit if your companypays on the 35th day after receiving the invoice? (Assume a 365-day year.) Show your complete solution.McEwan Industries sells on terms of 3/10, net 35. Total sales for the year are $1,947,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 74 days after their purchases. Assume 365 days in year for your calculations. a. What is the days sales outstanding? Round your answer to two decimal places. days b. What is the average amount of receivables? Do not round intermediate calculations. Round your answer to the nearest cent. c. What is the percentage cost of trade credit to customers who take the discount? If your answer is zero, enter zero. Round your answer to two decimal places. d. What is the percentage cost of trade credit to customers who do not take the discount and pay in 74 days? If your answer is zero, enter zero. Do not round intermediate calculations. Round your answers to two decimal places. Nominal cost: Effective cost: % e. What would happen to McEwan's accounts receivable if it toughened up on its collection policy with…
