1. An invoice received included the following information: merchandise price, $5,900; terms 1/10, n/eom; FOB shipping point with prepaid freight of $361. Assuming that a credit for merchandise returned of $1,200 is granted prior to payment and that the invoice is paid within the discount period, what amount of cash should be paid by the buyer?

a. $1,200

b. $6,198

c. $5,014

d. $5,900

2.. Cash and accounts receivable for Adams Company are as follows:

Line Item Description	Current Year	Prior Year
Cash	$71,556	$53,400
Accounts receivable (net)	21,808	37,600

What is the amount and percentage of increase or decrease that would be shown with horizontal analysis? Enter a decrease using a minus sign before the amount and the percentage.

Account	Dollar Change	Percent Change	Effect
Cash
Accounts Receivable