Essence of Skunk Fragrances, Ltd., sells 8,300 units of its perfume collection e

Question

Essence of Skunk Fragrances, Ltd., sells 8,300 units of its perfume collection each year at a price per unit of $490. All sales are on credit with terms of 1/10, net 60. The discount is taken by 75 percent of the customers.

Calculate the average collection period. (Round your answer to 2 decimal places. (e.g., 32.16))

What is the receivables turnover? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 3 decimal places. (e.g., 32.161))

What is the amount of the company

Calculate the average collection period. (Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

TOTAL SALES DURING THE YEAR = 8300*490 = 4067000

AVERAGE COLLECTION PERIOD = 0.75*10 + 0.25*60

=22.5 DAYS

COMPANY

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