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  • 1.  Part 2 MCQs query.

    Posted 22 days ago
    Hello folks,
    Greetings!

    Can anyone help me out with this question and its concept.
    Jackson Distributors sells to retail stores on credit terms of 2/10, net 30. Daily sales average 150 units at a price of $300 each. Assuming that all sales are on credit and 60% of customers take the discount and pay on day 10 while the rest of the customers pay on day 30, the amount of Jackson\'s accounts receivable is
    A.
    $1,350,000
    B.
    $990,000
    C.
    $900,000
    D.
    $810,000

    Option 'D' is the right option.
    Regards,
    Pragati Verma


  • 2.  RE: Part 2 MCQs query.

    Posted 21 days ago
    Hi Pragati

    See below solution:

    60% sale for 10 days = 150*300*10 = $450,000 60%    =  $270,000
    40% sale for 30 Days =   150*300*30= $ 1,350,000 40%=  $540000

    Total  Receivables                                                                 $810,000

    I hope this can be a help to you.

    Regards







  • 3.  RE: Part 2 MCQs query.

    Posted 21 days ago

    Dear Pragati,

     

    There are different ways to calculate this question, but I will explain you easiest way

     

    Daily sales 150 units @ price $300 = $45,000 per day 60% of customers pay due amount within 10 days of discount period $45,000 per day * 10 = $450,000* 60% = $270,000 while the rest of other customers are taking 30 days to pay due amount 45,000 per day * 30 days = 13,50,000*40% = $540,000

     

    Total accounts receivable is here 270,000+540,000 = $810,000  (D)

     

                                        (OR)

     

    You can also solve this question with number of outstanding days or sales days multiplied by daily sales amount.

     

    In first scenario 60% customers will pay within 10 days 0.60*10 = 6

    While the remaining 40% customers will pay within 30 days 0.40*30=12

    Total number of days taken by customers is 6+12 = 18

    Daily sales units 150*@ price 300 = $45,000 per day sales amount

    To get accounts receivable 18*45,000 = $810,000 option  (D)

     

     

     

    Thanks & Regards

    Sumair Shaik

    Accountant

    United Arab emirates

     

     

    Sent from Mail for Windows

     






  • 4.  RE: Part 2 MCQs query.

    Posted 18 days ago
    Hi

    The amount of AR includes:
    + 40% sales of first 20 days : 40% * 150units * $300 * 20 days
    + 100% sales of last 10 days: 100% *  150units * $300 * 10 days
    Total = $ 810000

    Hope it can be useful.

    Regards,
    Duong Tran Thuy