Macrosoft develops, produces, and markets a wide range of computer software, including the Windows operating system. On its recent financial statements, Macrosoft reported the following information about net sales revenue and accounts receivable (amounts millions). Accounts receivable, net of allowances of $414 and $377 Net sales revenue According to its Form 10-K, Macrosoft recorded bad debt expense of $122 and there were no bad debt recoveries during the current year. Required: 1. Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current year? Complete this question by entering your answers in the tabs below. 2. Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Macrosoft's sales during the period were on open account Beginning balance Net sales Current Year Debit $ 29,224 65,669 26.404 65.669 Answer is complete but not entirely correct. Required 1 Required 2 Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Macrosoft's sales during the period were on open account. (Enter your answers in millions not in dollars.) Accounts Receivable (Gross) Prior Year $26,781 64,697 Credit 85 Write-offs 25,809 Cash collections
Macrosoft develops, produces, and markets a wide range of computer software, including the Windows operating system. On its recent financial statements, Macrosoft reported the following information about net sales revenue and accounts receivable (amounts millions). Accounts receivable, net of allowances of $414 and $377 Net sales revenue According to its Form 10-K, Macrosoft recorded bad debt expense of $122 and there were no bad debt recoveries during the current year. Required: 1. Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current year? Complete this question by entering your answers in the tabs below. 2. Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Macrosoft's sales during the period were on open account Beginning balance Net sales Current Year Debit $ 29,224 65,669 26.404 65.669 Answer is complete but not entirely correct. Required 1 Required 2 Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Macrosoft's sales during the period were on open account. (Enter your answers in millions not in dollars.) Accounts Receivable (Gross) Prior Year $26,781 64,697 Credit 85 Write-offs 25,809 Cash collections
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Transcribed Image Text:Macrosoft develops, produces, and markets a wide range of computer software, including the Windows operating system. On its
recent financial statements, Macrosoft reported the following information about net sales revenue and accounts receivable (amount-
millions).
Accounts receivable, net of allowances of $414 and $377
Net sales revenue
According to its Form 10-K, Macrosoft recorded bad debt expense of $122 and there were no bad debt recoveries during the current
year.
Required:
1. Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current
year?
2. Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year,
assuming that all of Macrosoft's sales during the period were on open account
Complete this question by entering your answers in the tabs below.
Beginning
balance
Net sales
Debit
Required 1 Required 2
Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year,
assuming that all of Macrosoft's sales during the period were on open account. (Enter your answers in milions not in dollars.)
Accounts Receivable (Gross)
26.404
65.669
Current
Year
$ 29,224
65,669
Answer is complete but not entirely correct.
85
25,809
Prior
Year
$26,781
64,697
Credit
Write-offs
Cash collections
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