Interpreting the Accounts Receivable Footnote
Hewlett-Packard Company reports the following in its 2015 10-K report.
Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts.
|For the fiscal years ended October 31
|Allowance for doubtful accounts-accounts receivable|
|Balance, beginning of period||$232||$332||$464|
|Provision for doubtful accounts||46||25||23|
|Deductions, net of recoveries||(89)||(125)||(155)|
|Balance, end of period||$189||$232||$332|
(a) What is the gross amount of accounts receivables for Hewlett-Packard in fiscal 2015 and 2014?
|Gross accounts receivable||Answer?||Answer?|
(b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2015 and 2014? (Round your answers to two decimal places.)
|Percentage of uncollectible accounts to gross accounts receivable||%Answer?||%Answer?|
(c)What amount of bad debts expense did Hewlett-Packard report each year 2013 through 2015 (ignore increase in allowance from acquisitions)? What amount was actually written off?
|Bad debt expense||Answer?||Answer?||Answer?|
|Amounts actually written off||Answer?||Answer?||Answer?|
Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off?
(d)Compute Hewlett-Packard's write-offs as a percentage of the allowance account at the beginning of the year.
(Round your answers to two decimal places)
2015 write-offs as a percentage of beginning of year allowance: Answer%?
2014 write-offs as a percentage of beginning of year allowance: Answer%?
What inferences can we draw as a result of changes in the allowance for doubtful accounts from 2014 to 2015?
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