a) During December 2017 inventory with a cost of $130,000 was sold on account for $150,000 (assume a perpetual inventory system, not a
periodic one). Cash collections for the same period were $165,000.

b) In addition to the above (not included in the $150,000 of sales) was one sale of inventory with a cost of $20,000 and a selling price of $30,000 where the credit manager predicted only a 10% chance of actually getting paid but the transaction was carried out anyway - the terms of the sale required payment in 60 days this amount has not yet been collected and is not yet overdue as at December 31.