Foster industries sells on terms of 210 net 35 gross sales


Foster Industries sells on terms of 2/10, net 35. Gross sales last year were $450,000, and ac- counts receivable averaged $60,000. Half of Foster’s customers paid on Day 10 and took discounts. (a) What are Foster’s sales net of cash discounts taken? (b) What is the total dollar finance charge paid by the non-discount-paying customers? (c) What is the average collection period (DSO) for the non discount customers? Foster Industries sells on terms of 2/10, net 35. Gross sales last year were $450,000, and ac- counts receivable averaged $60,000. Half of Foster’s customers paid on Day 10 and took discounts. (a) What are Foster’s sales net of cash discounts taken? (b) What is the total dollar finance charge paid by the non-discount-paying customers? (c) What is the average collection period (DSO) for the non discount customers?

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Financial Management: Foster industries sells on terms of 210 net 35 gross sales
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