Fogel's Pumps offers its customers credit terms of 2/10,net 30,while Larry's Pumps offers terms of 2/10,net 45 days.The aging schedules for the two companies' receivables are shown below:Which company has the higher percentage of overdue accounts,and what is its percentage of overdue accounts? $\begin{array}{lllll}
\text { Age of } &{\text { Fogel's }} &{\text { Larry's }} \
\hline \text { Account(Days) } & \text { Value of Account } & \begin{array}{l}
\text { Percentage of } \
\text { Total Value }
\end{array} & \text { Value of Account } & \begin{array}{l}
\text { Percentage of } \
\text { Total Value }
\end{array} \
\hline 0-10 & \$ 58,800 & 60 \% & \$ 73,500 & 50 \% \
11-30 & 19,600 & 20 & 29,400 & 20 \
31-45 & 14,700 & 15 & 29,400 & 20 \
46-60 & 2,940 & 3 & 10,290 & 7 \
\text { Over } 60 & 1,960 & 2 & 4,410 & 3 \
\text { Total receivables } & \$ 98,000 & 100 \% & \$ 147,000 & 100 \%
\end{array}$

Question

Fogel's Pumps offers its customers credit terms of 2/10,net 30,while Larry's Pumps offers terms of 2/10,net 45 days.The aging schedules for the two companies' receivables are shown below:Which company has the higher percentage of overdue accounts,and what is its percentage of overdue accounts? $\begin{array}{lllll}
\text { Age of } &{\text { Fogel's }} &{\text { Larry's }} \
\hline  \text { Account(Days) } & \text { Value of Account } & \begin{array}{l}
\text { Percentage of } \
\text { Total Value }
\end{array} & \text { Value of Account } & \begin{array}{l}
\text { Percentage of } \
\text { Total Value }
\end{array} \
\hline 0-10 & \$ 58,800 & 60 \% & \$ 73,500 & 50 \% \
11-30 & 19,600 & 20 & 29,400 & 20 \
31-45 & 14,700 & 15 & 29,400 & 20 \
46-60 & 2,940 & 3 & 10,290 & 7 \
\text { Over } 60 & 1,960 & 2 & 4,410 & 3 \
\text { Total receivables } & \$ 98,000 & 100 \% & \$ 147,000 & 100 \%
\end{array}$

Quizplus · Accepted Answer

Fogel's Pumps has a higher percentage of overdue accounts at 20%, calculated by adding the percentages of accounts aged over 30 days (15% + 3% + 2%). Larry's Pumps, with terms of 2/10, net 45 days, does not consider accounts overdue until after 45 days, resulting in a lower percentage of overdue accounts.

Fogel's Pumps Offers Its Customers Credit Terms of 2/10,net 30,while