question 14 Your company sells on terms 311 net 35 For the y

question 14

Your company sells on terms 3/11, net 35. For the year, your company has recorded $2, 250, 800 of sales. 45% of your customers pay on the 11th day and gladly take discounts, white the other 55% pay, on average, 45 days after their purchases. (365 days in a year) Calculate the average amount of receivables at any given moment

Solution

DOS=.45(11)+.55(45)

        = 30 days

Sales per day= 2250800 /365 =6167

The average receivable amount is Receivables=(DOS)(ADS)

=6167*30 = 184997