Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit te

Question

Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 3.0/10, net 90. Based on experience, 35 percent of all customers will take the discount.A.)What is the average collection period for Kyoto Joe? (Use 365 days a year.)

B. If Kyoto Joe sells 1,020 forecasts every month at a price of $1,700 each, what is its average balance sheet amount in accounts receivable? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

A.)What is the average collection period for Kyoto Joe?

Average collection period= 90 days

B. If Kyoto Joe sells 1,020 forecasts every month at a price of $1,700 each, what is its average balance sheet amount in accounts receivable? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Average balance sheet amount in accounts receivable= 1020*1700*12*65%*90/365 = $3,334,980.82

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