In: Finance
Following is the table for sales and payments made by credit customers:
Months | January | February | March | April | May | June | July | August |
Credit Sales | 75,000.00 | 125,000.00 | 145,000.00 | 130,000.00 | 165,000.00 | 185,000.00 | ||
Payment for January credit sales | 18,750.00 | 26,250.00 | 30,000.00 | |||||
Payment for February credit sales | 31,250.00 | 43,750.00 | 50,000.00 | |||||
Payment for March credit sales | 36,250.00 | 50,750.00 | 58,000.00 | |||||
Payment for April credit sales | 32,500.00 | 45,500.00 | 52,000.00 | |||||
Payment for May credit sales | 41,250.00 | 57,750.00 | 66,000.00 | |||||
Payment for June credit sales | 46,250.00 | 64,750.00 | 74,000.00 | |||||
Total | 93,750.00 | 182,500.00 | 255,000.00 | 263,250.00 | 309,750.00 | 341,000.00 | 130,750.00 | 74,000.00 |
Receivables balance at the end of March = 50,000+50,750+58000 = $ 108,750.0
Receivables balance at the end of June = 66,000+64,750+74,000 = $ 204,750.0
1st quarter ADS = (75,000+125,000+145,000)/90 = $3,833.3
1st quarter DSO = Receivables at the end of March/Total Credit sales by end of March*90
= 108,750/345,000 X 90 = 41.4 days
2nd quarter ADS = (130,000+165,000+185,000)/90= $ 5,333.3
2nd quarter DSO = 204,750/480,000 X 90 = 38.4 days