Wendy Company currently has P750,000 in accounts receivable

Transcribed Image Text: Problem 4. Wendy Company currently has P750,000 in accounts receivable. Its days sales
outstanding (DSO) is 55 days. Wendy Company wants to reduce its DSO to the industry average
of 35 days by pressuring more of its customers to pay their bills on time. The company’s CFO
estimates that if this policy is adopted Wendy’s average sales will fall by 15%. Assuming that
the company adopts this change and succeeds in reducing its average collection period to 35
days and does lose 15% of its sales, what will be the level of accounts receivable (to the nearest
peso) following the change?

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