Commercial Supply Corp. bills its accounts on terms of 2/10 net 30. The firm's accounts receivable include $200,000 that has been outstanding for ten or fewer days, $126,000 outstanding for 11 to 30 days, $98,000 outstanding for 31 to 40 days, $12,000 outstanding for 41 to 50 days, $20,000 outstanding for 51 to 60 days, and $7,000 outstanding for more than 60 days. Is the aging schedule for Commercial Supply Corp. bottom heavy?
A) No, since 70% of the outstanding sales are on time and the percentage of long term outstanding payments is low.
B) Yes, since the percentage of payments that are late are greater than the percentage of payments that are on time.
C) No, since since the percentage of payments that are late are greater than the percentage of payments that are on time.
D) Given information is not sufficient to reach any conclusion.
Answer: A
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