Reference no: EM132898658

Question 1: If a company had been extending trade credit on a 2/10, net 30 basis, what change would be expected on the balance sheet/statement of financial position of its customer if the firm went to a net cash 30 policy?

Option 1: Increased payables

Option 2: Decreased payables

Option 3: Increased receivables

Option 4: Decreased in cash

Question 2: Kami Company expects to have sales of $30,000 in January, $33,000 in February, and $38,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month following the sale, and 4% are credit sales paid 2 months following the sale, how much are the cash receipts from sales in March?

Option 1: $38,000

Option 2: $55,000

Option 3: $32,800

Option 4: $30,000

Option 5: $47,400