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Foster Industries sells on terms of 2/10, net 35. Gross sales last year were $450,000, and accounts receivable averaged $60,000. Half of Foster's customers paid on Day 10 and took discounts. a) What are Foster's sales net of cash discounts taken? b) What is the total dollar finance charge paid by the non-discount-paying customers? c) What is the average collection period (DSO) for the non-discount customers?

Foster Industries sells on terms of 2/10, net 35. Gross sales last year were $450,000, and accounts receivable averaged $60,000. Half of Foster's customers paid on Day 10 and took discounts. a) What are Foster's sales net of cash discounts taken? b) What is the total dollar finance charge paid by the non-discount-paying customers? c) What is the average collection period (DSO) for the non-discount customers?

FINANCIAL ACCOUNTING
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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Foster Industries sells on terms of 2/10, net 35. Gross sales last year were $450,000, and accounts receivable averaged $60,000. Half of Foster's customers paid on Day 10 and took discounts. a) What are Foster's sales net of cash discounts taken? b) What is the total dollar finance charge paid by the non-discount-paying customers? c) What is the average collection period (DSO) for the non-discount customers?
Transcribed Image Text:Foster Industries sells on terms of 2/10, net 35. Gross sales last year were $450,000, and accounts receivable averaged $60,000. Half of Foster's customers paid on Day 10 and took discounts. a) What are Foster's sales net of cash discounts taken? b) What is the total dollar finance charge paid by the non-discount-paying customers? c) What is the average collection period (DSO) for the non-discount customers?
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