ssence of Skunk Fragrances, Ltd., sells 6,900 units of its perfume collection each year at a price per unit of $399. All sales are on credit with terms of 2/30, net 50. The discount is taken by 50 percent of the customers. a.What is the amount of the company’s accounts receivable? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)b.In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 4/30, net 50 to preserve its market share. Will this change in policy increase or decrease accounts receivable?

ssence of Skunk Fragrances, Ltd., sells 6,900 units of its perfume collection each year at a price per unit of $399. All sales are on credit with terms of 2/30, net 50. The discount is taken by 50 percent of the customers. a.What is the amount of the company’s accounts receivable? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)b.In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 4/30, net 50 to preserve its market share. Will this change in policy increase or decrease accounts receivable?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 4Q: American Signs allows customers to pay with their Jones credit card and cash. Jones charges American...

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a.What is the amount of the company’s accounts receivable? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)b.In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 4/30, net 50 to preserve its market share. Will this change in policy increase or decrease accounts receivable?

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

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Essence of Skunk Fragrances, Limited, sells 9,300 units of its perfume collection each year at a price per unit of $415. All sales are on credit with terms of 1/10, net 40. The discount is taken by 45 percent of the customers. a. Calculate the average collection period. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the receivables turnover? (Use 365 days a year. Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) c. What is the amount of the company's average receivable? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Average collection period b. Receivables turnover c. Average receivables days times
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