Solved – Increase sales from their present annual $24 million, Kim Chi Company, a wholesaler, may try more liberal credit standards

April 5, 2020April 5, 2020 by Syangden

Question 1 Increase sales from their present annual $24 million, Kim Chi Company, a wholesaler, may try more liberal credit standards. Currently, the firm has…

Credit Management

Solved – Porras Pottery Products, Inc., spends $220,000 per annum on its collection department. The company has $ 12 Million in credit sales

April 5, 2020April 5, 2020 by Syangden

Question Porras Pottery Products, Inc., spends $220,000 per annum on its collection department. The company has $ 12 Million in credit sales, its average collection…

Credit Management

Solved – The Acme Aglet Corporation has a 12% opportunity cost of funds and currently sells on terms of “net 10, EOM”

April 5, 2020April 5, 2020 by Syangden

Question The Acme Aglet Corporation has a 12% opportunity cost of funds and currently sells on terms of “net 10, EOM”. (This means that goods…

Credit Management

Solved – Kidd Corporation presently gives credit terms of “net 30 days”. It has $60 Million in credit sales and its average collection period is 45 days

April 5, 2020April 5, 2020 by Syangden

Question Kidd Corporation presently gives credit terms of “net 30 days”. It has $60 Million in credit sales and its average collection period is 45…

Credit Management

Solved – Matlock Gauge Company makes wind and current gauges for pleasure boats. The gauges are sold throughout the Southeast to boat dealers

April 5, 2020April 5, 2020 by Syangden

Question Matlock Gauge Company makes wind and current gauges for pleasure boats. The gauges are sold throughout the Southeast to boat dealers, and the average…

Credit Management

Solved – The McCollough Company has a variable operating cost ratio (VCR) of 70%, its cost of capital is 10% and current sales are $10,000. All of its sales

April 5, 2020April 5, 2020 by Syangden

Question The McCollough Company has a variable operating cost ratio (VCR) of 70%, its cost of capital is 10% and current sales are $10,000. All…

Credit Management

Solved – The Pettit Corporation has annual credit sales of $2 Million. Current expenses for the collection department are $30,000, bad debt losses

April 5, 2020April 5, 2020 by Syangden

Question The Pettit Corporation has annual credit sales of $2 Million. Current expenses for the collection department are $30,000, bad debt losses are 2% and…

Credit Management

Solved – Flint Distributors makes all sales on a credit basis, selling on terms of 2/10, net 30. Once a year, it evaluates the creditworthiness of all its customers.

April 4, 2020April 4, 2020 by Syangden

Question Flint Distributors makes all sales on a credit basis, selling on terms of 2/10, net 30. Once a year, it evaluates the creditworthiness of…

Credit Management

Solved – Morrissey Industries sells on terms of 3/10, net 30. Total sales for the year are $900,000. Forty percent of the customers pay on Day 10 and take

April 3, 2020April 3, 2020 by Syangden

Question Morrissey Industries sells on terms of 3/10, net 30. Total sales for the year are $900,000. Forty percent of the customers pay on Day…

Credit Management

Solved – Bey Technologies is considering changing its credit terms from 2/15, net 30 to 3/10, net 30 to speed collections. Currently, 40 percent of Bey’s non

April 3, 2020April 3, 2020 by Syangden

Question Bey Technologies is considering changing its credit terms from 2/15, net 30 to 3/10, net 30 to speed collections. Currently, 40 percent of Bey’s…