If Mac goes ahead and recognizes a sale of \($15,000\) in its December 31 financial statements for this inconclusive agreement, which of the following is correct?

(a) CFFO will increase by \($15,000\).

(b) CFFO will increase by \($10,000\).

(c) Operating income will increase by \($15,000\).

(d) Operating income will increase by \($5,000\).

Use the following data

XYZ Company has finalized its financial statements for its fiscal year ended December 31. At this stage, all of its transactions have been recorded properly in terms of GAAP. On January 10, XYZ Company is considering securing a back-dated order for a bill and hold sale from one of its customers.

The back-dated order would be for goods with a selling price of \($10,000\) and a cost of \($4,000.\) The goods would be delivered on February 28, two months after the year end. The order would be back-dated as though it were placed on December 28.