1. What is the amount of gross (total) accounts receivable due from customers at the end of 2017 and 2016? 2. What is the amount of bad debt write-offs during 2017? 3. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2017. 4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2017.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Minta Corporation is a leading manufacturer of sports apparel, shoes, and equipment. The company's 2017 financial statements
contain the following information ($ in millions):
2017
2016
Balance sheets:
Accounts receivable, net
Income statements:
Sales revenue
$ 4,172
$ 3,736
$35,745
$33,771
A note disclosed that the allowance for uncollectible accounts had a balance of $28 million and $52 million at the end of 2017 and
2016, respectively. Bad debt expense for 2017 was $49 million. Assume that all sales are made on a credit basis.
es
Required:
1. What is the amount of gross (total) accounts receivable due from customers at the end of 2017 and 2016?
2. What is the amount of bad debt write-offs during 2017?
3. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2017.
4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2017.
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What is the amount of gross (total) accounts receivable due from customers at the end of 2017 and 2016? (Enter your
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2017
2016
Accounts receivable, gross
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