Maddox resources has credite given answer accounting questions Maddox Resources has credit sales of $197,000 yearly with credit terms ofnet 30 days, which is also the average collection period. Maddox does notoffer a discount for early payment, so its customers take the full 30 daysto pay.1. What is the average receivables balance?2. What is the receivables turnover?3. If Maddox offered a 3 percent discount for payment in 10 days and everycustomer took advantage of the new terms, what would the new averagereceivables balance be?

Explanation for 1: We are required to calculate the amount of average accounts receivable from the…

Answered: Maddox Resources has credit sales of…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 33P

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ABC Corp. has net credit sales of P1,440,000 yearly with credit terms of n/30, which is also the average collection period. BECK does not offer discounts for early payment; thus, customers take the full 30 days to pay. (Use 360 days/year) 1.What is the average receivable balance? 2.What is the accounts receivable turnover?
Maddox Resources has credit sales of $198.000 yearly with credit terms of net 30 days, which is also the average collection period. Maddox does not offer a discount for early payment, so its customers take the full 30 days to pay. (Use 365 days in a year.) a-1. What is the average receivables balance? (Do not round Intermediate calculations. Round the final answer to nearest whole dollar.) Accounts receivable balance Receivables turnover a-2. What is the receivables turnover? (Round the final answer to 2 decimal places.) New receivable balance $ 16274 b. If Maddox offered a 2 percent discount for payment in 10 days and every customer took advantage of the new terms, what would the new average receivables balance be? Use the full sales of $198.000 for your calculation of receivables. (Do not round Intermediate calculations. Round the floal answer to nearest whole dollar.) Net Change X $ 2658 Yes No 3 c-1. If Maddox reduces its bank loans, which cost 12 percent, by the cash generated…
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