New receivable balance c-1. If Maddox reduces its bank loans, which cost 12 gain or loss to the firm? Use the full sales of $198.0 minus sign. Do not round Intermediate calculatio $5425 $2658 Yes No Net Change c-2. Should Maddox Resources offer the discount?
New receivable balance c-1. If Maddox reduces its bank loans, which cost 12 gain or loss to the firm? Use the full sales of $198.0 minus sign. Do not round Intermediate calculatio $5425 $2658 Yes No Net Change c-2. Should Maddox Resources offer the discount?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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 from reduced receivables, what will be the net
gain or loss to the firm? Use the full sales of $198,000 for your calculation of receivables. (Negative answers should be Indicated by a
minus sign. Do not round Intermediate calculations. Round the final answer to nearest whole dollar. Omit $ sign in your response.)
$ 5425
c-2. Should Maddox Resources offer the discount?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0d26ba29-f06e-4901-83ae-8272fd349c12%2F13192c29-d63f-4178-842a-c43ca6abbdd7%2Ftgxg2fa_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 from reduced receivables, what will be the net
gain or loss to the firm? Use the full sales of $198,000 for your calculation of receivables. (Negative answers should be Indicated by a
minus sign. Do not round Intermediate calculations. Round the final answer to nearest whole dollar. Omit $ sign in your response.)
$ 5425
c-2. Should Maddox Resources offer the discount?
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