Required: 1. What is the amount of accounts receivable due from customers at the end of 2016 and 2015? 2. What amount of accounts receivable did Gemstone write off during 2016? 3. What is the amount of Gemstone's gross sales for the 2016 fiscal year? 4. 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?
Required: 1. What is the amount of accounts receivable due from customers at the end of 2016 and 2015? 2. What amount of accounts receivable did Gemstone write off during 2016? 3. What is the amount of Gemstone's gross sales for the 2016 fiscal year? 4. 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
Related questions
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.
Question
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Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 4
What amount of accounts receivable did Gemston Products write off during 2016? What is the amount of Gemston Product's
gross sales for the 2016 fiscal year? Assuming that all sales are made on a credit basis, what is the amount of cash Gemston
Products collected from customers during the 2016 fiscal year? (Enter your answers in thousands.)
2. Accounts receivable write off
3.
Gross sales
4. Cash collections
$
$
9,320
715,860
< Req 1
Reg 2 to 4 >
Transcribed Image Text: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
Current assets:
Receivables, less allowances of $132,340 in
2016 and $87,940 in 2015
Calculation of account receivables, net:
Receivables
$460,500
Less: allowance for doubtful accounts
Less: reserve for product returns
Trade accounts receivable, net:
A disclosure note accompanying the financial statements reported the following ($ in thousands)
Year Ended
2015
$440,800
2016
(In thousands)
2015
$ 592,840 $528,740
(123,020)
(9,320)
$ 460,500
(77,720)
(10,220)
$440,800
Assume that the company reported bad debt expense in 2016 of $191,800 and had products returned for credit totaling $187,120 (sales
price). Net sales for 2016 were $5,618,800 ($ in thousands).
Required:
1. What is the amount of accounts receivable due from customers at the end of 2016 and 2015?
2. What amount of accounts receivable did Gemstone write off during 2016?
3. What is the amount of Gemstone's gross sales for the 2016 fiscal year?
4. 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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