Problem:
Essence of Skunk Fragrances, Ltd., sells 7,400 units of its perfume collection each year at a price per unit of $690. All sales are on credit with terms of 1/15, net 60. The discount is taken by 55 percent of the customers.
Required:
Question 1: Calculate the average collection period.
Question 2: What is the receivables turnover?
Question 3: What is the amount of the company's average receivable?
Note: Please provide reasons to support your answer.