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Relax Companys budgeted sales for the coming year are P40500000 of which 80 are expected to be credit sales at terms of n30 Relax estimates that a proposed relaxation of credit standards will in

Relax Company’s budgeted sales for the coming year are P40,500,000 of which 80% are expected to be credit sales at terms of n/30. Relax estimates that a proposed relaxation of credit standards will increase credit sales by 20% and increase the average collection period from 30 days to 40 days. Based on a 360-day year, the proposed relaxation of credit to standards will result in an expected increase in the average accounts receivable balance of
A. P540,000                C. P900,000
B. P2,700,000             D. P1,620,000

Jun 20 2021 View more View Less

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