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# 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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