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Short Construction and Fryman Construction

Financial Management

Short Construction offers its customer's credit terms of 2/10, net 30 days, while Fryman Construction offers its customer's credit terms of 2/10, net 45 days. The aging schedules for each of the two companies' accounts receivable are reported below:

Short Construction Fryman Construction
Age of Value of Percentage of Value of Percentage of
Account (Days) Account Total Value Account Total Value
0-10 $58,800 60% $ 73,500 50%
11-30 19,600 20 29,400 20
31-45 14,700 15 29,400 20
46-60 2,940 3 10,290 7
Over 60 1,960 2 4,410 3
Total AR $98,000 $147,000

Which company has the greatest percentage of overdue accounts and what is their percentage of overdue accounts?

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For Short Construction, its credit terms is 2/10, net 30 days. From the aging schedule above, we can see that the ...

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This solution is comprised of a detailed explanation to answer which company has the greatest percentage of overdue accounts and what is their percentage of overdue accounts.

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