Contemporary Media Sign Company sells on account. Recently, Contemporary reported the following figures:
2013 2012
Net Credit Sales $ 572,000 $ 600,000
Receivables at end of year 38,700 46,100
Requirements Compute Contemporary’s days’ sales in receivables for 2013. (Round to the nearest day.)
Suppose Contemporary’s normal credit terms for a sale on account are “2/10, net 30.” How well does Contemporary’s collection period compare to the company’s credit terms? Is this good or bad for Contemporary?