Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates that the average amount of costly trade credit carried is $275,000. What is the firm's average accounts payable balance? Assume a 365-day year. a. $330,000 b. $366,667 c. $409,750 d. $412,500 e. $359,333

Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates that the average amount of costly trade credit carried is $275,000. What is the firm's average accounts payable balance? Assume a 365-day year. a. $330,000 b. $366,667 c. $409,750 d. $412,500 e. $359,333

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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If a firm has sales of $21,752,000 a year, and the average collection period for the industry is 45 days, what should this firm’s accounts receivable be if the firm is comparable to the industry? Assume there are 365 days in a year. Do not round intermediate calculations. Round your answer to the nearest dollar.
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