Question

In: Finance

Han Corp's sales last year were $315,000, and its year-end receivables were $52,500. The firm sells...

Han Corp's sales last year were $315,000, and its year-end receivables were $52,500. The firm sells on terms that call for customers to pay 30 days after the purchase, but some delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO – Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. Assume all sales to be on credit. Do not round your intermediate calculations.
a.

37.31
b.

30.83
c.

23.43
d.

24.36
e.

29.60

Solutions

Expert Solution

Account Receivables Turnover Ratio = Sales / average Account Receivables
= $315000/52500
=6 times
Account Receivables Turnover ratio
Average Collection Period = 365/ Account Receivables turnover ratio
= 365 days /6
=60.83 days
Late pay = 60.83 - 30
=30.83 days
Correct Option : b.30.83

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Harper Corp.'s sales last year were $425,000, and its year-end receivables were $42,500. Harper sells on...
Harper Corp.'s sales last year were $425,000, and its year-end receivables were $42,500. Harper sells on terms that call for customers to pay 30 days after the purchase, but many delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO -Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. Answers: a. 6.50 b. 8.37 c. 9.27 d. 8.81 e. 9.74
X-1 Corp's total assets at the end of last year were $405,000 and its EBIT was...
X-1 Corp's total assets at the end of last year were $405,000 and its EBIT was 52,500. What was its basic earning power (BEP) ratio? a. 12.96% b. 14.29% c. 11.70% d. 12.31% e. 13.61%
Ajax Corp's sales last year were $400,000, its operating costs were $362,500, and its interest charges...
Ajax Corp's sales last year were $400,000, its operating costs were $362,500, and its interest charges were $12,500. What was the firm's times-interest-earned (TIE) ratio? a. 3.66 b. 2.46 c. 2.61 d. 3.48 e. 3.00
The annual sales for​ Salco, Inc. were $ 4.55 million last year. The​ firm's end-of-year balance...
The annual sales for​ Salco, Inc. were $ 4.55 million last year. The​ firm's end-of-year balance sheet was as​ follows: Current assets $499,000 Liabilities $1,001,500 Net fixed assets 1504000 Owners' equity 1001500 Total Assets $2,003,000 Total $2,003,000  LOADING.... ​ Salco's income statement for the year was as​ follows: Sales $4,550,000 Less: Cost of goods sold (3,506,000) Gross profit $1,044,000 Less: Operating expenses (495,000) Net operating income $549,000 Less: Interest expense (101,000) Earnings before taxes $448,000 Less: Taxes (35%) (156,800) Net...
Uncollectible Accounts—Percentage of Sales and Percentage of Receivables At the end of the current year, the...
Uncollectible Accounts—Percentage of Sales and Percentage of Receivables At the end of the current year, the accounts receivable account of Glenn's Nursery Supplies has a debit balance of $390,000. Credit sales are $2,780,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of $1,860. a. The percentage of sales method is used and...
Uncollectible Accounts—Percentage of Sales and Percentage of Receivables At the end of the current year, the...
Uncollectible Accounts—Percentage of Sales and Percentage of Receivables At the end of the current year, the accounts receivable account of Parker's Nursery Supplies has a debit balance of $344,120. Credit sales are $2,658,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of $1,985. a. The percentage of sales method is used and...
A firm has $40 million in sales last year. Its asset to sales ratio is .4...
A firm has $40 million in sales last year. Its asset to sales ratio is .4 and its net profit margin of .07. The firm plans to maintain its current retention ratio is .6; its payables amount to $400,000 million, and it does not have any bank loans as notes payable. If 20% increase in sales is anticipated, how much additional financing is required?        
The annual sales for​ Salco, Inc. were $4.67 million last year. The​ firm's end-of-year balance sheet...
The annual sales for​ Salco, Inc. were $4.67 million last year. The​ firm's end-of-year balance sheet was as​ follows:  Current assets   $501,000   Liabilities   $1,004,500 Net fixed assets   1,508,000   Owners' equity   1,004,500 Total Assets   $2,009,000   Total   $2,009,000 . ​ Salco's income statement for the year was as​ follows: Sales    $4,670,000 Less: Cost of goods sold    (3,498,000) Gross profit    $1,172,000 Less: Operating expenses    (497,000) Net operating income    $675,000 Less: Interest expense    (98,000) Earnings before taxes   ...
The annual sales for Salco, Inc. were $4.57 million last year. The firm's end-of-year balance sheet...
The annual sales for Salco, Inc. were $4.57 million last year. The firm's end-of-year balance sheet was as follows: Current assets $509,000 Liabilities $997,000 Net fixed assets 1,485,000 ​Owners' equity 997,000 Total Assets $1,994,000 Total $1,994,000 Salco's income statement for the year was as follows: Sales $4,570,000 ​Less: Cost of goods sold (3,492,000) Gross profit $1,078,000 ​Less: Operating expenses \(503,000) Net operating income $575,000 ​Less: Interest expense (97,000) Earnings before taxes $478,000 ​Less: Taxes ​(35%​) (167,300) Net income $310,700 a....
 The annual sales for​ Salco, Inc. were $4.46 million last year. The​ firm's end-of-year balance sheet...
 The annual sales for​ Salco, Inc. were $4.46 million last year. The​ firm's end-of-year balance sheet was as​ follows:   . ​ Salco's income statement for the year was as​ follows:   . a. Calculate​ Salco's total asset​ turnover, operating profit​ margin, and operating return on assets. b.  Salco plans to renovate one of its plants and the renovation will require an added investment in plant and equipment of $1.04 million. The firm will maintain its present debt ratio of 50 percent...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT