Smelly Perfumes sells 3,500 units of its perfume collection each year at a price per unit of $275.All sales are on credit with terms of 1/7,net 30.The discount is taken by 40 percent of the customers.What is the amount of the company's accounts receivable?

Question

Quizplus · Accepted Answer

Average collection period = (0.40 × 7) + (0.60 × 30) = 20.8 days; Accounts receivable = [(3,500 × $275)/365] × 20.8 = $54,849

Smelly Perfumes Sells 3,500 Units of Its Perfume Collection Each