Nike, Inc., 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 $ 3,677     $ 3,241   Income statements:               Sales revenue $ 34,350     $ 32,376     A note disclosed that the allowance for uncollectible accounts had a balance of $19 million and $43 million at the end of 2017 and 2016, respectively. Bad debt expense for 2017 was $40 million. Assume that all sales are made on a credit basis.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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Nike, Inc., 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 $ 3,677     $ 3,241  
Income statements:              
Sales revenue $ 34,350     $ 32,376  
 


A note disclosed that the allowance for uncollectible accounts had a balance of $19 million and $43 million at the end of 2017 and 2016, respectively. Bad debt expense for 2017 was $40 million. Assume that all sales are made on a credit basis.

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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