What would happen to mcdowells accounts receivables

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Reference no: EM13335700

McDowell Industries sells on terms of 3/10, net 20. Total sales for the year are $1,192,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 66 days after their purchases. Assume 365 days in year for your calculations.

What is the days' sales outstanding?

What is the average amount of receivables?

What is the percentage cost of trade credit to customers who take the discount?

What is the percentage cost of trade credit to customers who do not take the discount and pay on Day 66?

What would happen to McDowell's accounts receivables if McDowell toughened up on its collection policy with the result that all nondiscount customers paid on the 20th day?

Reference no: EM13335700

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