Receivables Investment McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 70 days after their purchases. What is the days sales outstanding?.40 * 10 +.60 * 70 4 + 42 days days sales outstanding = 46 days What is the average amount of receivables? 1,921,000*46/365 $242,098.63 What is the percentage cost of trade credit to customers who take the discount?.03*365 /.97x20 56.44% What is the percentage cost of trade credit to customers who do not take the discount and pay in 70 days?.03*365 /.97x60 18.8% What would happen to McEwan's accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?
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