Determine the consequences of this transaction

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Reference no: EM13301522

Your firm receives a $5 million order on the last day of the year, which your firm fills with inventory on hand that costs your firm $2 million. Your customer picks up the inventory on the day it is ordered and pays your firm $1 million, and your firm bills the customer for the balance of the order, stipulating that the balance is to be paid in 30 days. Your firm is cash-based. Ignore any income tax implications. Determine the consequences of this transaction for each of the following:

• Revenue
• Earnings
• Receivables
• Inventory
• Cash

Reference no: EM13301522

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