Don't use ai given answer general accounting questions Miyagi Data, Inc. sells earnings forecasts for Japanese securities. Its creditterms are 2/20, net 60. Based on experience, 75% of all customers will takethe discount.a. What is the average collection period?b. If the company sells 1,330 forecasts every month at a price of $2,430each, what is its average balance sheet amount in accounts receivable?

Step 1: Define Average Collection PeriodA company's time to collect its receivables balance is…

Answered: Miyagi Data, Inc. sells earnings…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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Kyoto Joe, Incorporated, sells earnings forecasts for Japanese securities. Its credit terms are 3/20, net 40. Based on experience, 70 percent of all customers will take the discount. Assume 365 days per year. What is the average collection period? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. If the company sells 1,370 forecasts every month at a price of $2,470 each, what is its average daily balance sheet amount in accounts receivable? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Kirk Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to $750,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.)
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Hinkle Corporation buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to $550,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.) a. $94,932 b. $109,895 c. $90,411 d. $104,662 e. $99,678

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