6th Edition

ISBN: 9781260823875

Author: PHILLIPS

Publisher: MCGRAW-HILL CUSTOM PUBLISHING

Concept explainers

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 t…

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 ari…

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Textbook Question

Chapter 8, Problem 13E

Using Financial Statement Disclosures to Infer Write-Offs and Bad Debt Expense and to Calculate the Receivables Turnover Ratio

Microsoft Corporation develops, produces, and markets a wide range of computer software including the Windows operating system. Microsoft reported the following information about Net Sales Revenue and Accounts Receivable (all amounts in millions).

Chapter 8, Problem 13E, Using Financial Statement Disclosures to Infer Write-Offs and Bad Debt Expense and to Calculate the

According to its Form 10-K, Microsoft recorded Bad Debt Expense of $150 and did not recover any previously written-off accounts during the year ended June 30, 2016.

Required:

1. What amount of accounts receivable was written off during the year ended June 30, 2016?
2. What was Microsoft’s receivables turnover ratio (to one decimal place) in the current year?
3. Does your answer in requirement 2 suggest the collectibility of Accounts Receivable improved (or deteriorated) in 2016, relative to 2015 when the turnover was 5.0?

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Chapter 8, Problem 12E

Chapter 8, Problem 14E

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Chapter 8 Solutions

FUNDAMENTALS OF FINANCIAL ACCOUNTING

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Solution Summary: The author explains that write-off refers to the deduction of a certain amount from accounts receivable, when it is decided that the amount would be uncollectible forever.

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Chapter 8 Solutions