Days sales outstanding
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McDowell industries sells on terms of 3/10, net 30. Total sales for the year are $912,500. Forty percent of the customers pay on the 10th day and take discounts; the other 60 percent pay, on average, 40 day days after their purchases.
a. What is the days sales outstanding?
B. What is the average amount of receivabls?
c. What would happen to average receivables if McDowell toughened up on its collection policy with the result that all nondiscount customers paid on th 30th day?
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This helps in computation of Days sales outstanding and average amount of receivabls
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a. Forty percent of the customers pay on the 10th day and take discounts; the other 60 percent pay, on average, 40 day days after their purchases.
Days ...
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