Question

Whats the total Late Fee Interest charged to the customers based on the policy below?
Vittorla's Furniture Bazaar
Accounts Receivable Aging Summary
As of June 30, 2015
Customer Current 1-30 Days 31-60 Days 61-90 Days 90 Days Total
Bull and Bear Café $750 $750
Eckhardt Design $1,000 $1,000
Halifax Sporting Goods $500 $500
Walker Studios $1,500 $1,500
TOTAL $2,250 $500 $1,000 $0 $0 $3,750
Late Fee Interest Policy
Age Interest
Current 0%
1-30 Days 0%
31-60 Days 5%
61-90 Days 10%
>90 Days 20%
a. $0
b. $50
c. $75
d. $100
e. $200

Answer 1

Answer:

b. $50

Explanation:

Calculation for the total Late Fee Interest charged to the customers

Under 1 to 30 days Halifax Sporting Goods had $500

Hence,

1 to 30 days= $ 500 x 0%

1 to 30 days= $ 0

Under 31 to 60 days Eckhardt Design had $1,000

Hence,

31 to 60 days= $ 1,000 x 5%

31 to 60 days= $ 50

Under 61 to 90 days Walker Studios had $0

Hence,

61 to 90 days= $ 0 x 10%

61 to 90 days = $ 0

Under 90 days there is also $0

Hence,

90 days=$ 0 x 20%

90 days = $ 0

The Total Late Fee Interest

1 to 30 days= $ 0

31 to 60 days= $ 50

61 to 90 days = $ 0

90 days = $ 0

Total =$50

Therefore the total Late Fee Interest charged to the customers will be $50