Please provide answer the general accounting question not use ai. . Miranda Tool Company sells to retail hardware stores on creditterms of 'net 30'. Annual credit sales are $18 million and are spreadevenly throughout the year. The company's variable cost ratio is 0.70,and its accounts receivable average $1.9 million. Using thisinformation, determine the following for the company:a. Average daily credit salesb. Average collection periodc. Average investment in receivables

Step 1: Define Average Collection PeriodThe average collection period is the amount of time taken…

Answered: Miranda Tool Company sells to retail…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 1P

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What is their collection period??
Answer? ? General Accounting
Grunewald Industries sells on terms of 1/10, net 40. Gross sales last year were $4,453,000 and accounts receivable averaged $427,000. Half of Grunewald's customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald's nondiscount customers? (Hint: Calculate daily sales based on a 365-day year, calculate the average receivables for discount customers, and then find the DSO for the nondiscount customers.) Do not round intermediate calculations. Round your answers to two decimal places.
Urmila
ans
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XYZ Corporation has credit sales of $10,640,000 and receivales of $1,520,000. What is the receivales turnover and what is the average collection period (days sales outstanding) ?
What is the companys average collection period?

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