How well does Contemporary’s collection period compare to the company’s credit terms? Is this good or bad for Contemporary?
Contemporary Media Sign Incorporated sells on account. Recently, Contemporary reported the following figures: Requirements 1. Compute Contemporary’s days’ sales in receivables for 2013. (Round to the nearest day.) 2. 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?