AMAG Pharmaceuticals writes in their 10-K:

We typically offer a 2% prompt payment discount to certain customers as an incentive to remit payment in accordance with the stated terms of the invoice, generally 30 days. Because we anticipate that those customers who are offered this discount will take advantage of the discount, 100% of the prompt payment discount at the time of sale are accrued, based on the gross amount of each invoice. We adjust the accrual quarterly to reflect actual experience.

a. Suppose AMAGs customers purchase a gross amount of $10,000 under the terms described above. How would they record the sale?

b. Suppose all customers take the discount and pay within 30 days. How would they record the cash received?

c. Suppose 90% of the purchases are paid within 30 days and 10% are paid after 30 days. Record the receipts of cash for the first 90% and the second 10%.

d. How would things have been different if AMAG assumed that all customers would not take the discount and used the gross method instead.

NOTE: Use GAAP to answer the questions.