McEwan Industries sells on terms of 3/10, net 40. Total sales for the year are $1,912,500; 40% of the customers pay on the 10th day andtake discounts, while the other 60% pay, on average, 66 days after their purchases. Assume 365 days in year for your calculations. The datahas been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questionsbelow.a. What is the days sales outstanding? Round your answer to two decimal places.43.6$b. What is the average amount of receivables? Round your answer to the nearest cent. Do not round intermediate calculations.days228,452c. What is the percentage cost of trade credit to customers who take the discount? Round your answers to two decimal places.3.09 % d. What is the percentage cost of trade credit to customers who do not take the discount and pay in 66 days? Round your answers totwo decimal places. Do not round intermediate calculations.Nominal cost:Effective cost:DSO =>17.543.09Average receivables = $17.02e. What would happen to McEwan's accounts receivable if it toughened up on its collection policy with the result that all nondiscountcustomers paid on the 40th day? Round your answers to two decimal places. Do not round intermediate calculations.days%%228,768.49

Days Sales Outstanding (DSO) is a term used to describe the average time it takes for a business to…

McEwan Industries sells on terms of 3/10, net 40. Total sales for the year are $1,912,500; 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. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. a. What is the days sales outstanding? Round your answer to two decimal places. 43.6 $ b. What is the average amount of receivables? Round your answer to the nearest cent. Do not round intermediate calculations. 228,452 days c. What is the percentage cost of trade credit to customers who take the discount? Round your answers to two decimal places. 3.09 %

McEwan Industries sells on terms of 3/10, net 40. Total sales for the year are $1,912,500; 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. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. a. What is the days sales outstanding? Round your answer to two decimal places. 43.6 $ b. What is the average amount of receivables? Round your answer to the nearest cent. Do not round intermediate calculations. 228,452 days c. What is the percentage cost of trade credit to customers who take the discount? Round your answers to two decimal places. 3.09 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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