Faldo Corp Sells on Terms That Allow Customers 45 Days

question 2

Multiple Choice

Faldo Corp sells on terms that allow customers 45 days to pay for merchandise.Its sales last year were $300,000,and its year-end receivables were $60,000.If its DSO is less than the 45-day credit period,then customers are paying on time.Otherwise,they are paying late.By how much are customers paying early or late? Base your answer on this equation: DSO - Credit Period = Days early or late,and use a 365-day year when calculating the DSO.A positive answer indicates late payments,while a negative answer indicates early payments.Assume all sales to be on credit.Do not round your intermediate calculations.

• A) 27.16
• B) 26.60
• C) 22.12
• D) 28.00
• E) 25.48

---

Definitions:

Aqueous Solution

A mixture where water acts as the dissolving medium.

LiI

Lithium iodide, a chemical compound made of lithium and iodine, used notably in batteries and pharmaceuticals.

Electrolyte

A substance that produces an electrically conducting solution when dissolved in water, important in many biological processes.

Electrolyte

A compound that forms an electrically conductive solution upon being dissolved in a polar solvent, like water.