Minta Corporation, is a leading manufacturer of sports apparel, shoes, and equipment. The company's 2020 financial statements contain the following information ($ in millions): Balance sheets: Accounts receivable, net Allowance for uncollectible accounts Income statements: Sales revenue Statement of Cash Flows: Amortization, impairment and other Decrease in accounts receivable Assume that all sales are made on a credit basis. 2020 $ 3,024 219 $ 38,178 403 1,244 2019 $ 4,547 45 Required: 1. What is the amount of gross (total) accounts receivable due from customers at the end of 2020 and 2019? 2. Assume that bad debt expense is included in "amortization, impairment and other," such that the 2020 decrease in accounts receivable of $1,244 reflects only the difference between sales and collections. Prepare a T account that depicts how sales, collections, bad debt expense, and writeoffs of bad debts affect the balance of net accounts receivable with a debit, a credit or not at all, and estimate Minta's 2020 bad debt expense. 3. Prepare a T account that depicts how bad debt expense and writeoffs of bad debts affect the balance of the allowance for uncollectible accounts with a debit, credit or not at all, and estimate the amount of bad debts written off by Minta during 2020.
Minta Corporation, is a leading manufacturer of sports apparel, shoes, and equipment. The company's 2020 financial statements contain the following information ($ in millions): Balance sheets: Accounts receivable, net Allowance for uncollectible accounts Income statements: Sales revenue Statement of Cash Flows: Amortization, impairment and other Decrease in accounts receivable Assume that all sales are made on a credit basis. 2020 $ 3,024 219 $ 38,178 403 1,244 2019 $ 4,547 45 Required: 1. What is the amount of gross (total) accounts receivable due from customers at the end of 2020 and 2019? 2. Assume that bad debt expense is included in "amortization, impairment and other," such that the 2020 decrease in accounts receivable of $1,244 reflects only the difference between sales and collections. Prepare a T account that depicts how sales, collections, bad debt expense, and writeoffs of bad debts affect the balance of net accounts receivable with a debit, a credit or not at all, and estimate Minta's 2020 bad debt expense. 3. Prepare a T account that depicts how bad debt expense and writeoffs of bad debts affect the balance of the allowance for uncollectible accounts with a debit, credit or not at all, and estimate the amount of bad debts written off by Minta during 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Minta Corporation, is a leading manufacturer of sports apparel, shoes, and equipment. The company's 2020 financial statements
contain the following information ($ in millions):
Balance sheets:
Accounts receivable, net
Allowance for uncollectible accounts
Income statements:
Sales revenue
Statement of Cash Flows:
Amortization, impairment and other
Decrease in accounts receivable
Assume that all sales are made on a credit basis.
2020
$3,024
219
$ 38,178
403
1,244
2019
$ 4,547
45
Required:
1. What is the amount of gross (total) accounts receivable due from customers at the end of 2020 and 2019?
2. Assume that bad debt expense is included in "amortization, impairment and other," such that the 2020 decrease in accounts
receivable of $1,244 reflects only the difference between sales and collections. Prepare a T account that depicts how sales,
collections, bad debt expense, and writeoffs of bad debts affect the balance of net accounts receivable with a debit, a credit or
not at all, and estimate Minta's 2020 bad debt expense.
3. Prepare a T account that depicts how bad debt expense and writeoffs of bad debts affect the balance of the allowance for
uncollectible accounts with a debit, credit or not at all, and estimate the amount of bad debts written off by Minta during 2020.
4. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during
2020.
5. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2020.
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