Some companies offer discounts to customers in order to give incentive for paying earlier than the...
Some companies offer discounts to customers in order to give incentive for paying earlier than the due date. Which two terms incentive customers to accept trade discounts? (choose 2)
Length of the credit period
Account of discount
Sales commission
Day’s sales in receivables
Cash cycle
Amount of discount
Homework Answers
These two terms incentivise customers to accept trade discounts
Length of the credit period
Amount of discount
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Some companies offer discounts to customers in order to give
incentive for paying earlier than the...
10. Cost of trade credit Firms usually offer their customers some form of trade credit. This...
10. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Green Moose Industries buys on terms of 2.5/15, net 45 from its chief supplier. If Green Moose receives an invoice for $1,545.78, what would be the true price of this invoice? $1,582.50 $1,507.14 $1,205.71 $1,356.43 O $1,582.50 $1,507.14...
4. Cost of trade credit Aa Aa Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold f...
4. Cost of trade credit Aa Aa Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold for the buyer and the seller. Consider this case: Cold Duck Manufacturing Inc. buys most of its raw materials from a single supplier. This supplier sells to Cold Duck on terms of 2/15, net 60. The cost per period of the trade credit extended to...
4. Cost of trade credit Firms usually offer their customers some form of trade credit. This...
4. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold for the buyer and the seller. Consider this case: Green Moose Industries buys most of its raw materials from a single supplier. This supplier sells to Green Moose on terms of 1/10, net 30. (Note: Round all intermediate calculations to four decimal places, The cost per period...
The credit terms offered to customers for early payment need to be sufficiently lucrative for them to want to pay early, but not so lucrative that the seller is effectively paying an inordinately high...
The credit terms offered to customers for early payment need to be sufficiently lucrative for them to want to pay early, but not so lucrative that the seller is effectively paying an inordinately high interest rate for the use of the money that it is receiving early. The term structure used for credit terms is to first state the number of days you are giving customers from the invoice date in which to take advantage of the early payment credit...
please show all working Q1. Cash Budget Exercise: Below are some important figures from the budget...
please show all working
Q1. Cash Budget Exercise: Below are some important figures from the budget of the Sundays Limited for the next three months. Apr Mar $160,000 68,000 $140,000 64,000 May $192,000 80,000 Credit sales Credit purchases Cash disbursements: Wages, taxes, and expenses Interest Equipment purchases 7,000 8,000 3,000 50,000 3,000 8,400 3,000 4,000 The company predicts that 10% of its sales will never be collected. 50% of its sales will be collected in the month of the sale:...
Maddox Resources has credit sales of $197,000 yearly with credit terms of net 30 days, which...
Maddox Resources has credit sales of $197,000 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. (Use 365 days in a year.) a-1. What is the average receivables balance? (Do not round intermediate calculations. Round the final answer to nearest whole dollar.) Accounts receivable balance $ a-2. What is the receivables turnover? (Round the...
Finance
Maddox Resources has credit sales of $197,000 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. (Use 365 days in a year.) a-1. What is the average receivables balance? (Do not round intermediate calculations. Round the final answer to nearest whole dollar.) Accounts receivable balance $ a-2. What is the receivables turnover? (Round the final answer to 2 decimal places.) Receivables turnover ...
P6-1 Reporting Net Sales and Expenses with Discounts, Returns, and Bad Debts LO6-1, 6-2 [The following...
P6-1 Reporting Net Sales and Expenses with Discounts, Returns, and Bad Debts LO6-1, 6-2 [The following information applies to the questions displayed below.] The following data were selected from the records of Sykes Company for the year ended December 31, Current Year. Balances January 1, Current Year Accounts receivable (various customers) $ 120,000 Allowance for doubtful accounts 9,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 4/10, n/30 (assume a...
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000...
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
4. In order to receive the special dividend that the firm announced on July 20, 2020,...
4. In order to receive the special dividend that the firm announced on July 20, 2020, what is the latest date on which you have to purchase the firm’s stock, which is publicly traded in the US markets only? A) End of Day of the Declaration date B) The day before the Ex-dividend date C) End of Day of the Record date D) End of Day of the Ex-dividend date E) The day before the Record date 9. Which one...
10. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Green Moose Industries buys on terms of 2.5/15, net 45 from its chief supplier. If Green Moose receives an invoice for $1,545.78, what would be the true price of this invoice? $1,582.50 $1,507.14 $1,205.71 $1,356.43 O $1,582.50 $1,507.14...
4. Cost of trade credit Aa Aa Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold for the buyer and the seller. Consider this case: Cold Duck Manufacturing Inc. buys most of its raw materials from a single supplier. This supplier sells to Cold Duck on terms of 2/15, net 60. The cost per period of the trade credit extended to...
4. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold for the buyer and the seller. Consider this case: Green Moose Industries buys most of its raw materials from a single supplier. This supplier sells to Green Moose on terms of 1/10, net 30. (Note: Round all intermediate calculations to four decimal places, The cost per period...
please show all working
Q1. Cash Budget Exercise: Below are some important figures from the budget of the Sundays Limited for the next three months. Apr Mar $160,000 68,000 $140,000 64,000 May $192,000 80,000 Credit sales Credit purchases Cash disbursements: Wages, taxes, and expenses Interest Equipment purchases 7,000 8,000 3,000 50,000 3,000 8,400 3,000 4,000 The company predicts that 10% of its sales will never be collected. 50% of its sales will be collected in the month of the sale:...
Annual sales $9,700,000 Cost of goods sold $7,275,000 Inventory $3,200,000 Accounts receivable $1,800,000 Accounts payable $2,400,000 Blue Ostrich's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.) Value Inventory conversion period Average collection period Payables deferral period Cash conversion cycle...
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