HW-3 Receivables (Empty)

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Vanderbilt University *

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Accounting

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Apr 3, 2024

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Assign-3 Receivables and Bad debts Instructions or using the percent format 10.6%. Note: percentages may be expressed as a decimal (0.106)

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Assign-3 Part 1 During 2017, Sales were $105,000 and the firm estimates that 4 percent of sales will be uncollectible. In addition, the Allowance for Bad Debts account had a $3,800 credit balance at a. General Journal Date Debit Credit Dec 31 Bad Debts Expense 4,200 Allowance for Doubtful Accounts 4,200 To record the entry for bad debt expense. b. Assume that a firm uses the 'aging' method for computing bad debt expense. Accounts receivable at December 31, 2018 were $29,000, with 17,000 not yet due, $8,000, one to thirty days overdue and $4,000 more than thirty days overdue. The firm estimates that 1%, 5%, and 40% of these amounts will be uncollectible. During 2018, $1,700 of receivables were written off and the allowance for doubtful accounts carried a 1,500 credit balance at the beginning of 2018. Prepare Complete the aging schedule and the allowance t-account. Not yet due 17,000 1-30 days past due 8,000 Over 30 days past due 4,000 $29,000 Calculation for Aging Schedule Amt. Due % Allowance Allowance for Doubtful Accts Current $17,000 1% 170 1,500 1-30 days $8,000 5% 400 over 30 $4,000 40% 1,600 1,700 2,370 $29,000 2,170 2,170 b. General Journal Date Debit Credit Dec 31 Bad Debts Expense 2,370 Allowance for Doubtful Accounts 2,370 To record the allowance for credit losses. Various Allowance for Doubtful Accounts 1,700 Accounts Receivable 1,700 To write-off receivables for the year the beginning of the year and $5,200 of receivables were written off during the year. Prepare the journal entry to record bad debt expense for 2017. the journal entries to write off receivables for the year and to record bad debt expense for 2018.

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Assign-3 Part II Using the following information and the annual report of Columbia Sportswear, answer the following questions. Income Statement 2016 2015 Net Sales (in thousands) $2,377,045 $2,326,180 Common Shares outstanding 70,632 71,064 From footnote 5, in the annual report: The following schedule (Valuation and Qaulifying Accounts) comes from the 10-K. This schedule shows the reconciliation of the allowance for doubtful accounts (as well as the allowance for sales returns). For instance, in 2016, the beginning balance in the allowace for doubtful accounts was $9,928. Columbia Sportswear charged bad debt expense of $2,037, and reduced the allowance account by $3,406. (Ignore the other column). The ending balance in the allowance account for 2016 was $8,556. Required: A 1. Choose which of the following best describes how Columbia recognizes revenue? A. Revenues are recognized when our performance obligations are satisfied as evidenced by transfer of control of promised goods to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services. B. Revenues are recognized when both the performance obligations are satisified and after Columbia has collected the cash. C. Revenues can only be recognized after all cash has been collected. Assign-3 Part II Financial Analysis of Columbia Sportswear

Assign-3 Part II Hint: you will need a balance sheet and an income statement number. Remember Gross Accounts Receivables are revenues that customers still owe the company. 2016 2015 Percentage of Revenues uncollected at the end of the year 14.4% 16.4% 3. Complete the following schedule Numbers in thousands 2016 2015 Net income (in thousands) $191,898 $174,337 Common shares outstanding (in thousands) 70,632 71,064 For Year Ended 2016 For Year Ended 2015 2.72 2.45 706.32 710.64 2. What percentage of Columbia’s revenues are still uncollected at the end of 2015 and 2016. What is EPS? To the nearest penny Amount (in thousands) needed to change EPS by a penny (after tax)

Assign-3 Part III Common Size Income Statement Ex Income Statement Y 2016 Y 2015 Y 2014 Y 2016 Y 2015 Y 2014 gr 1/1 - 12/31/2016 1/1 - 12/31/2015 1/1 - 12/31/2014 12/31/2016 12/31/2015 12/31/2014 Net sales $2,377,045,000 $2,326,180,000 $2,100,590,000 100.0% 100.0% 100.0% Cost of sales 1,266,697,000 1,252,680,000 1,145,639,000 53.3% 53.9% 54.5% 1,110,348,000 1,073,500,000 954,951,000 46.7% 46.1% 45.5% Selling, general & admi. expenses 677,627,000 647,081,000 591,094,000 28.5% 27.8% 28.1% Inventory planning, storing, & handling 65,757,000 61,338,000 59,561,000 2.8% 2.6% 2.8% Advertising costs 118,663,000 120,764,000 110,109,000 5.0% 5.2% 5.2% Bad debt expense 2,037,000 2,788,000 2,299,000 1.0% 0.1% 0.1% Net licensing income (10,244,000) (8,192,000) (6,956,000) -0.4% -0.4% -0.3% $256,508,000 $249,721,000 $198,844,000 10.8% 10.7% 9.5% Interest income, net 2,003,000 1,531,000 1,004,000 0.1% 0.1% 0.0% Interest expense on note payable (1,041,000) (1,099,000) (1,053,000) 0.0% 0.0% -0.1% Other non-operating expense (572,000) (2,834,000) (274,000) 0.0% -0.1% 0.0% $256,898,000 $247,319,000 $198,521,000 10.8% 10.6% 9.5% Income tax expense (Note 10) (58,459,000) (67,468,000) (56,662,000) -2.5% -2.9% -2.7% $198,439,000 $179,851,000 $141,859,000 8.3% 7.7% 6.8% Gross profit Income from operations Income before income tax Net income Required: Compute the common-size income statement and indicate using the blue-shaded pull-down menus, for 2016,

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