1 Grunewald Industries Sells On Terms Of 2 10 Net 40 Gross Sales Last Year Were 4 5 2743580

(1) Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were$4,562,500 and accounts receivable averaged $437,500. Half of Grunewald’s customerspaid on the 10th day and took discounts. What are the nominal and effectivecosts of trade credit to Grunewald’s nondiscount customers? (Hint: Calculate sales/day based on a 365-day year, then calculate average receivables of discount customers,and then find the DSO for the nondiscount customers.

 

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