Considering change in credit policy to terms

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Reference no: EM131047833

Essence of Skunk Fragrances, Ltd., sells 6,100 units of its perfume collection each year at a price per unit of $391. All sales are on credit with terms of 3/30, net 60. The discount is taken by 50 percent of the customers. (Enter your answer as directed, but do not round intermediate calculations.)

Requirement 1: What is the amount of the company’s accounts receivable?

Requirement 2:

In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 5/30, net 60 to preserve its market share. Will this change in policy increase or decrease accounts receivable?

A. Increase

B. Decrease

Reference no: EM131047833

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