Making a Credit Policy Decision with Changing Variables
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Maddox Resources has credit sales of $180,000 yearly with credit terms of net 30 days, which is also the average collection period. Maddox does not offer a discount for early payment, so its customers take the full 30 days to pay.What is the average receivables balance? What is the receivables turnover?
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Solution Summary
The solution concisely explains the calculation of average receivables and receivables turnover.
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The average receivables will be equal to 30 days of sales since the customers take full 30 days to pay.
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