Taylor Textbooks Inc.buys on terms of 2/15,net 50 days.It does not take discounts,and it typically pays on time,50 days after the invoice date.Net purchases amount to $450,000 per year.On average,what is the dollar amount of costly trade credit (total credit -free credit)the firm receives during the year? (Assume a 365-day year,and note that purchases are net of discounts.)

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$$\begin{array}{l}
\begin{array} { l } 
\text { Purchases}  &\$450,000 \ 
\text { Discaunt } \%& 2\%\
\text { Discaunt days}  &15 \ 
\end{array}
\begin{array} { l } 
\text { Net days} & 50\
\text {days to payment}  &50 \ 
\text {Days /Years}  &365 \ 
\end{array}
\end{array}$$ 
Purchases/day = $450,000/365 = $1,233
Avg.trade credit = Average A/P = Days to payment - Net purchases/day = $61,644
Free trade credit = Discount days -Purchases/day = $18,493
Costly trade credit = Total credit - Free credit = $43,151
Alternatively,Costly TC = (Days to pmt.-Disc.days)* (Purchases/day)= $43,151