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Problem 7 11 Aging of accounts receivable LO4 Route Canal Shipping Company has the following schedule for aging of accounts receivable Age of Receivables April

Problem 7-11 Aging of accounts receivable [LO4]

Route Canal Shipping Company has the following schedule for aging of accounts receivable:

Age of Receivables
April 30, 2013

(1) (2) (3) (4)
Month of
Sales
Age of
Account
Amounts Percent of
Amount Due
April 0–30 $ 212,220 _______
March 31–60   94,320 _______
February 61–90   141,480 _______
January 91–120   23,580 _______
   

 
Total receivables   $ 471,600 100%
   



 

a.

Calculate the percentage of amount due for each month.

Month of Sales Percent of Amount Due
April   %  
March   %  
February   %  
January   %  
   
 
Total receivables   100 %  
   

 

b.

If the firm had $1,572,000 in credit sales over the four-month period, compute the average collection period. Average daily sales should be based on a 120-day period.

Average collection period days
c.

If the firm likes to see its bills collected in 41 days, should it be satisfied with the average collection period?

  Yes
  No
d.

Disregarding your answer to part c and considering the aging schedule for accounts receivable, should the company be satisfied?

YesNo

 

May 17 2020 View more View Less

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