Cash Flow Implications What should be the effect of each of the following situations on the evaluation of Gray Company’s financial assets?

a. A significant part of the current receivables is from a single customer that has a strong credit rating and a record of prompt payment.

b. A significant part of the current receivables is from a single customer that has a spotty payment record and relatively poor credit rating.

c. A significant portion of Gray’s cash is on deposit in European banks.

d. A significant portion of total financial assets is invested in marketable securities that have declined in value since the time of purchase.

e. Accounts receivable are reported at the total amount receivable. Accounts receivable are reduced and bad debt expense recorded when it is established that an account cannot be collected.

f. A noninterest-bearing note receivable due in 5 years is included in financial assets at its face amount.