Ripley%20Shirt%20Co - but cash sales to remain unchanged If...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
10 Point Exercise, Due 11-1-11. See pp. 417-418 and apply reading to the following. Ripley Shirt Co. sells on credit and manages its own receivables. Average experience for the past year has been as follows: Cash Credit Total Sales $300,000 $300,000 $600,000 COGS 165,000 165,000 330,000 Uncollect. Exp. -- 10,000 10,000 Other Expenses 84,000 84,000 168,000 John Ripley, the owner, is considering whether to accept bankcards (VISA, MasterCard). Ripley expects total sales to increase by 10%
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: but cash sales to remain unchanged. If Ripley switches to bankcards, the business can save $8,000 on other expenses, but VISA and MasterCard charge 2% on bankcard sales. Ripley figures that the increase in sales due to the increased volume of bankcard sales would be 10%. Required : Should Ripley Company start selling on bankcards? Show the computations of net income under the present plan and under the bankcard plan....
View Full Document

This note was uploaded on 11/08/2011 for the course ACC 101 taught by Professor Scottcazzad during the Spring '11 term at Jefferson College.

Ask a homework question - tutors are online