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bala
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Joined: 09 Jan 2009
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Posts: 355

Posted: 02 Feb 2009 at 15:11 \| IP Logged

Jackson Distributors sells to retail stores on credit terms of 2/10, net 30. Daily sales average 150 units at a price of $300 each. Assuming that all sales are on credit and 60 percent of customers take the discount and pay on Day 10 while the rest of the customers pay on Day 30, the amount of Jackson's accounts receivable is:

ans is $810,000

i came up with an ans that is not provided in option. wht am i missing here? tried to understand Becker explanation but its not helping.
can someone plz explain?

cpayesican
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Joined: 28 Dec 2008
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Posts: 219

Posted: 02 Feb 2009 at 15:17 \| IP Logged

daily sales is 150 units

60% of the customers take the discount and pay on day 10
40% of the customers do not take the discount and pay on day 30

accounts receivable:

those taking the discount 60% X 150 units X $300 per unit X 10 days outstanding= 270000

those not taking the discount 40% X 150 units X $300 per unit X 30 days outstanding = 540000

Total:810000

Hope that helps!

__________________
BEC passed Becker/Wiley
FAR 7/2/09 Yaeger H-study passed
REG 10/2/09 Yaeger H-study passed(received 12/21)
AUD 11/23/09 Yaeger HS passed
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ms500
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Joined: 30 Jun 2008
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Posted: 02 Feb 2009 at 15:22 \| IP Logged

Hi Bala

Discount taken in 10 days=60% of 150

=90 units x 300 x 10 days=270000

normal credit period =40% of 150

= 60 units x 300 x 30 days= 540000

Total AR=810000

thanks

__________________
BEC - Passed
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ysjd.patel
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Joined: 12 Jan 2009
Location: United States
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Posted: 02 Feb 2009 at 19:39 \| IP Logged

hi ms500
all the best for yr exam.. when u giving it?

ms500
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Joined: 30 Jun 2008
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Posts: 482

Posted: 02 Feb 2009 at 20:27 \| IP Logged

Thanks yssjd.patel, on 4th feb

So far feeling confident, let's see in the test

thanks

__________________
BEC - Passed
REG - Passed
Audit- Passed
FARE - Passed Feb 2011 Finally Done
Ethics - 95

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