Problem 17-7 Size of Accounts Receivable [LO 2] Essence of Skunk Fragrances

Problem 17-7 Size of Accounts Receivable [LO 2]

Essence of Skunk Fragrances Ltd. sells 6300 units of its perfume collection each year at a price per unit of $393. All sales are on
credit with terms of 2/20 net 60. The discount is taken by 45 percent of the customers.

What is the amount of the company%u2019s accounts receivable? (Do not include the dollar sign ($). Round your answer to
2 decimal places (e.g. 32.16).)

In reaction to sales by its main competitor Sewage Spray Essence of Skunk is considering a change in its credit policy to terms of 4/20
net 60 to preserve its market share. Will this change in policy increase or decrease accounts receivable?
(Click to select) Decrease Increase