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Route Canal Shipping Company has the following schedule for aging of accounts receivable: Age of Receivables...

Route Canal Shipping Company has the following schedule for aging of accounts receivable:

Age of Receivables
April 30, 20X1
(1) (2) (3) (4)
Month of
Sales		 Age of
Account		 Amounts Percent of
Amount Due
April 0–30 $ 175,440 _______
March 31–60 87,720 _______
February 61–90 131,580 _______
January 91–120 43,860 _______
Total receivables $ 438,600 100%


a. Calculate the percentage of amount due for each month.



b. If the firm had $1,548,000 in credit sales over the four-month period, compute the average collection period. Average daily credit sales should be based on a 120-day period.



c. If the firm likes to see its bills collected in 39 days, should it be satisfied with the average collection period?

  • Yes

  • No



d. Disregarding your answer to part c and considering the aging schedule for accounts receivable, should the company be satisfied?

  • Yes

  • No

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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