Essence of Skunk Fragrances, Ltd., sells 7,400 units of its perfume collection e

Question

Essence of Skunk Fragrances, Ltd., sells 7,400 units of its perfume collection each year at a price per unit of $690. All sales are on credit with terms of 1/15, net 60. The discount is taken by 55 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

Essence of Skunk Fragrances, Ltd., sells 7,400 units of its perfume collection each year at a price per unit of $690. All sales are on credit with terms of 1/15, net 60. The discount is taken by 55 percent of the customers.

Explanation / Answer

Essence of Skunk Fragrances, Ltd., sells 7,400 units of its perfume collection each year at a price per unit of $690. All sales are on credit with terms of 1/15, net 60. The discount is taken by 55 percent of the customers.

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

Average collection period = 15*55% + 60*45% = 35.25

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))

Receivables turnover = 365/35.25 = 10.355

What is the amount of the company

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

Average collection period = 15*55% + 60*45% = 35.25

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