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    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 Preview

    The average receivables will be equal to 30 days of sales since the customers take full 30 days to pay.

    Average ...

    Solution Summary

    The solution concisely explains the calculation of average receivables and receivables turnover.