Gemstone Products located in New York City, is one of the world's largest producers of beauty and related products. The company's consolidated balance sheets for the 2016 and 2015 fiscal years included the following ($ in thousands): 2016 2015 Current assets: Receivables, less allowances of $131,720 in 2016 and $87,320 in 2015 $ 459,700 $ 440,400 A disclosure note accompanying the financial statements reported the following ($ in thousands) Year Ended 2016 (In thousands) 2015 (In thousands) Calculation of account receivables, net: Receivables $ 591,420 $ 527,720 Less: allowance for doubtful accounts (122,960) (77,660) Less: reserve for product returns (8,760) (9,660) Trade accounts receivable, net: $ 459,700 $ 440,400 Assume that the company reported bad debt expense in 2016 of $191,400 and had products returned for credit totaling $187,060 (sales price). Net sales for 2016 were $5,598,800 ($ in thousands). Required: What is the amount of accounts receivable due from customers at the end of 2016 and 2015? What amount of accounts receivable did Gemstone write off during 2016? What is the amount of Gemstone's gross sales for the 2016 fiscal year? Assuming that all sales are made on a credit basis, what is the amount of cash Gemstone collected from customers during the 2016 fiscal year?
Gemstone Products located in New York City, is one of the world's largest producers of beauty and related products. The company's consolidated balance sheets for the 2016 and 2015 fiscal years included the following ($ in thousands): 2016 2015 Current assets: Receivables, less allowances of $131,720 in 2016 and $87,320 in 2015 $ 459,700 $ 440,400 A disclosure note accompanying the financial statements reported the following ($ in thousands) Year Ended 2016 (In thousands) 2015 (In thousands) Calculation of account receivables, net: Receivables $ 591,420 $ 527,720 Less: allowance for doubtful accounts (122,960) (77,660) Less: reserve for product returns (8,760) (9,660) Trade accounts receivable, net: $ 459,700 $ 440,400 Assume that the company reported bad debt expense in 2016 of $191,400 and had products returned for credit totaling $187,060 (sales price). Net sales for 2016 were $5,598,800 ($ in thousands). Required: What is the amount of accounts receivable due from customers at the end of 2016 and 2015? What amount of accounts receivable did Gemstone write off during 2016? What is the amount of Gemstone's gross sales for the 2016 fiscal year? Assuming that all sales are made on a credit basis, what is the amount of cash Gemstone collected from customers during the 2016 fiscal year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Gemstone Products located in New York City, is one of the world's largest producers of beauty and related products. The company's consolidated
| 2016 | 2015 | |
|---|---|---|
| Current assets: | ||
| Receivables, less allowances of $131,720 in 2016 and $87,320 in 2015 | $ 459,700 | $ 440,400 |
A disclosure note accompanying the financial statements reported the following ($ in thousands)
| Year Ended | ||
|---|---|---|
| 2016 (In thousands) | 2015 (In thousands) | |
| Calculation of account receivables, net: | ||
| Receivables | $ 591,420 | $ 527,720 |
| Less: allowance for doubtful accounts | (122,960) | (77,660) |
| Less: reserve for product returns | (8,760) | (9,660) |
| Trade |
$ 459,700 | $ 440,400 |
Assume that the company reported
Required:
- What is the amount of accounts receivable due from customers at the end of 2016 and 2015?
- What amount of accounts receivable did Gemstone write off during 2016?
- What is the amount of Gemstone's gross sales for the 2016 fiscal year?
- Assuming that all sales are made on a credit basis, what is the amount of cash Gemstone collected from customers during the 2016 fiscal year?
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