FM27 5 - c. Age of Accounts Dollar Value Percent of Total 0...

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Answers and Solutions: 27 - 5 27-3 a. March receivables = $120,000(0.8) + $100,000(0.5) = $146,000. June receivables = $160,000(0.8) + $140,000(0.5) = $198,000. b. 1st Quarter: ADS = ($50,000 + $100,000 + $120,000)/90 = $3,000. DSO = $146,000/$3,000 = 48.7 days. 2nd Quarter: ADS = ($105,000 + $140,000 + $160,000)/90 = $4,500. DSO = $198,000/$4,500 = 44.0 days. Cumulative: ADS = ($50,000 + $100,000 + $120,000 + $105,000 + $140,000 + $160,000)/180 = $3,750, or ADS = ($3,000 + $4,500)/2 = $3,750. DSO = $198,000/$3,750 = 52.8 days.
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Unformatted text preview: c. Age of Accounts Dollar Value Percent of Total 0 - 30 days $128,000 65% 31 - 60 70,000 35 61 - 90 $198,000 100 % d. Month Sales Receivables Receivables/Sales April $105,000 $ 0 0% May 140,000 70,000 50 June 160,000 128,000 80 $198,000 130 % 27-4 $25,000 interest-only loan, 11% nominal rate. Interest calculated as simple interest based on 365-day year. Interest for 1st month = ? Interest rate per day = 0.11/365 = 0.000301. Interest charge for period = (31)(0.11/365)($25,000) = $233.56....
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