Question
Soap Shop has sales of $600,000. The company expects half of their customers to take advantage of a 2 percent early payment discount. Further, the
Soap Shop has sales of $600,000. The company expects half of their customers to take advantage of a 2 percent early payment discount. Further, the company expects that 4 percent of gross sales will be uncollectible. Soap Shops receivables will be recognized at:
a. A receivable net amount of $594,000 and an allowance for credit losses of $24,000
b. A receivable full amount of $600,000 and an allowance for credit losses of $24,000
c. A receivable net amount of $594,000 and an allowance for trade discounts of $6,000
d. A receivable full amount of $600,000 and an allowable for credit losses of $0
e. None of the above answers are correct.
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