Chapter 6, Problem 14E

Inferring Bad Debt Write-Offs and Cash Collections from Customers

On its recent financial statements, Hassell Fine Foods reported the following information about net sales revenue and accounts receivable (amounts in thousands):

	Current Year	Prior Year
Accounts receivable, net of allowances of $153 and $117	$13,589	$11,338
Net revenues	60,420	51,122

According to its Form 10-K, Hassell recorded had debt expense of $88 and there were no bad debt recoveries during the current year. (Hint: Refer to the summary of the effects of accounting for bad debts on the Accounts Receivable (Gross) and the Allowance for Doubtful Accounts T-accounts. Use the T-accounts to solve for the missing values.)

Required:

1. 1. What amount of bad debts was written off during the current year?
2. 2. Based on your answer to requirement (I). solve for cash collected from customers for the current year, assuming that all of Hassell’s sales during the period were on open account.