Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. During December 10, 2020, Touch Tronix, Inc. sold 1,700,000 of goods to Advanced Communications, Inc. on account for 2,200,000. Advanced Communications, Inc. was dissatisfied with 25% of the merchandise it receives due to inferior quality. On December 21, 2020, Advanced Communications, Inc. returns the goods to Touch Tronix, Inc. for credit. Which of the following is true regarding the statement of financial position and the income statement for Touch Tronix, Inc. at December 31, 2020?

a. Assets will decrease by 125,000 and income will decrease by 125,000.

b. Assets will decrease by 425,000 and income will decrease by 425,000.

c. Assets will increase by 425,000 and income will decrease by 425,000.

d Assets will increase by 550,000 and income will decrease by 550,000.

Touch Tronix, Inc. sells component parts to Advanced Communications, Inc. a cell phone manufacturer. On December 10, 2020, Touch Tronix, Inc. sold 1,700,000 of goods to Advanced Communications, Inc. on account for 2,200,000. Terms of the sale were 2/10, net 30. On December 18, 2020, Advanced Communications, Inc. paid the account in full. Which of the following is true regarding the impact on the statement of financial position for Touch Tronix, Inc. when the payment is made on December 18, 2020?

a. Assets decreased by 2,200,000.

b. Assets decreased by 44,000.

c. Assets increased by 2,156,000.

d Assets decreased by 32,500.