Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 2/30, net 40. Based on experience, 70 percent of all customers will take the discount. a. What is the average collection period? (Do not round intermediate calculations and round your answer to 2 decimal places, 32.16.) b. If the company sells 1,270 forecasts every month at a price of $2,370 each, what is its average daily balance sheet amount in accounts receivable? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Q: A large retailer obtains merchandise under the credit terms of 1/10, net 30, but routinely takes 65…

A: Formula to calculate retailer's effective cost of trade credit is as follows: k=(1+100−discount…

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 3/25, net…

A: Credit Term of 3/25, Net 50 shows that buyers will get discount of 3% if payment is made in 25 days…

Q: A firm with sales of $22,000,000 has inventory of $800,000. The firm has cash sales (all sales are…

A: Answer    Inventory  storage period in days =            Inventory  / cost of goods sold  × 365…

Q: A large retailer obtains merchandise under the credit terms of 3/10, net 30, but routinely takes 60…

A: Every business needs goods and services to be purchased for its business. It can be on cash basis or…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate= Prime rate +4% = 8% + 4%= 12% Interest is calculated for the number of days on…

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 3/20, net…

A: Credit Term of 3/20, Net 40 shows that buyers will get discount of 3% if payment is made in 20 days…

Q: Gallant Sdn. Bhd., offers a credit period of 4 weeks.  The price and cost per unit of its product…

A: Since you have posted more than 3 sub-parts, we will provide the solution only to the first three…

Q: arge retailer obtains merchandise under the credit terms of 3/20, net 40, but routinely takes 65…

A: Discount=3% if paid within 20 daysCredit period=65 days365 days in yearFind out cost of trade…

Q: McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty…

A: Discounted customers=15×30%=4.5 days

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Prime rate The current interest rate charged by the financial institution to its customers is known…

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 3/20, net…

A: Given:

Q: ou prefer to extend credit on the assumption that you will be paid in full within 42 days of the…

A: Solution:- As given in the question, Firm X has an average inventory of $640,000 and sales of…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: the line of credit is a pre-approved limit offered by financial institutions, banks, etc, you can…

Q: ection period. BECK does not offer discounts for early payment; thus, customers take the full 30…

A: Basic concept of cash discount and receivable collection period

Q: On average, it will take you sell to the firm on credit. days to receive the payments, therefore,…

A: The operating cycle of a firm is time period from the purchase of raw materials till the receipt of…

Q: A large retailer obtains merchandise under the credit terms of 3/10, net 45, but routinely takes 60…

A: The objective of this question is to calculate the effective cost of trade credit for a retailer who…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Cook security systems has line of credit = $37500 Annual charge rate = 4% On October 1, Opening…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Solution- Interest rate = 6% +4% = 10%   Rate of interest charged each day = 10% / 360 = 0.02778%…

Q: Gonzales Company currently uses maximum trade credit by not taking discounts on its purchases. The…

A: Net income:Net income is the total amount of money that a business or individual has left over…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: The objective of the question is to calculate the new balance of Cook Security Systems' line of…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Variables in the question:Prime rate=8%Annual % rate charged=Prime rate +4%=8%+4%=12%Balance on…

Q: A large retailer obtains merchandise under the credit terms of 3/20, net 45, but routinely takes 60…

A: The formula for calculating the effective cost of trade credit is = (1 + [Discount rate / (1 –…

Q: 3) A large retailer obtains merchandise under the credit terms of 3/10, net 30, but routinely takes…

A: Discount Rate = 3% Discount Period = 10 days Credit Period = 50 days

Q: Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates…

A: We know that:The average amount of costly trade credit carried by the firm is $275,000.The firm pays…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Given, Cock security system has $37500 line of credit  Annual percentage rate  = 4% october pmt -…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: The current balance will be a function of opening balance, fresh borrowing, less repayment and the…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate applicable = Prime rate + premium Interest will be charge when the line of credit…

Q: The following forecasted information was taken from the books of Pakhama Enterprises.The following…

A: Budget: The budget is a financial plan and estimation of revenue and expenses and primary financial…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: The line of credit is the maximum limit of credit that a customer can avail from the financial…

Q: AL Enterprises purchases P4,562,500 in goods per year from its sole supplier on terms of 2/15, net…

A: Discount rate = 0.02 (i.e. 2%) Allowed payment days = 50 Discount days = 15

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Calculation of new balance are as follows

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: New balance  = balance  on 31 October  + interest

Q: Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 5/10,…

A: Trade credit is a type of credit that is extended by a business to its customers. It allows…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: DatesNo. of…

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 1/10, net…

A: The credit policy is an important part of decision making related with the working capital in credit…

Q: The following forecasted information was taken from the books of Pakhama Enterprises.The following…

A:

Q: Aggarwal Inc. buys on terms of 2/10, net 30, and it always pays on the 30th day. The CFO calculates…

A: Costly trade credit = Purchases per day*(days credit outstanding- discount period)$350,000 =…

Q: Sasakyani Company sells to retail auto supply stores on credit terms of 2/10, n/30. Annual credit…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.