GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Chapter 6, Problem 6.17E
Inferring Bad Debt Write-Offs and Cash Collections from Customers
Microsoft develops, produces, and markets a wide range of computer software, including the Windows operating system. On its recent financial statements, Microsoft reported the following information about net sales revenue and accounts receivable (amounts in millions).
| Current Year |
Prior Year | |
| Accounts receivable, net of allowances of $333 and $375 | $14,987 | $13,014 |
| Net revenues | 69,943 | 62,484 |
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
Required:
- 1. What amount of bad debts was written off during the current year?
- 2. Based on your answer to requirement (I). solve for cash collected from customers for the current year, assuming that all of Microsoft’s sales during the period were on open account.
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Vaughn Manufacturing has outstanding accounts receivable totaling $ 6.47 million as of December 31 and sales on credit during the
year of $ 24.5 million. There is also a credit balance of $ 11500 in the allowance for doubtful accounts. If the company estimates that
6% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?
O $388200.
O $ 399700.
O $ 376700.
O $1470000.
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Current Year
PriorYear
Accounts receivable, net of allowances of $411 and $380
$ 29,224
$ 26,381
Net sales revenue
66,169
64,597
According to its Form 10-K, Macrosoft recorded bad debt expense of $122 and there were no bad debt recoveries during the current year.
Required:
Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current year?
Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Macrosoft’s sales during the period were on open account.
LOANS AND RECIEVABLES
Your audit disclosed that on December 2021, the accounts receivable control account of AJ Company had a balance of P 2,865,000. An analysis of the accounts receivable account showed the following :
a. Accounts known to be worthless
P 37,500
b. Advance payments to creditors on purchase orders
150,000
c. Advances to affiliated companies
P 375,000
d. Customer’s accounts reporting credit balances arising from sales return
(225,000)
e. Interest receivable on bonds
150,000
f. Other trade accounts receivable -unassigned
750,000
g. Subscription receivables due in 30 days
825,000
h. Trade accounts receivable -assigned (Lim Company’s equity in assigned accounts is P150,000)
375,000…
Chapter 6 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 6 - Prob. 1QCh. 6 - What is gross profit or gross margin on sales? In...Ch. 6 - What is a credit card discount? How does it affect...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Differentiate accounts receivable from notes...Ch. 6 - Which basic accounting principle is the allowance...Ch. 6 - Using the allowance method, is bad debt expense...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Briefly explain how the total amount of cash...Ch. 6 - Prob. 16QCh. 6 - Sales discounts with terms 2/10, n/30 mean: a. 10...Ch. 6 - Gross sales total 300,000, one-half of which were...Ch. 6 - A company has been successful in reducing the...Ch. 6 - When a company using the allowance method writes...Ch. 6 - You have determined that Company X estimates bad...Ch. 6 - Prob. 6MCQCh. 6 - Which of the following is not a step toward...Ch. 6 - When using the allowance method, as bad debt...Ch. 6 - Which of the following best describes the proper...Ch. 6 - Prob. 10MCQCh. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Recording Bad Debts Prepare journal entries for...Ch. 6 - Prob. 6.4MECh. 6 - Determining the Effects of Credit Policy Changes...Ch. 6 - Prob. 6.6MECh. 6 - Prob. 6.7MECh. 6 - Prob. 6.1ECh. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Prob. 6.5ECh. 6 - Reporting Bad Debt Expense and Accounts Receivable...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Computing Bad Debt Expense Using Aging Analysis...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Prob. 6.14ECh. 6 - Prob. 6.15ECh. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Prob. 6.18ECh. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Recording, Reporting, and Evaluating a Bad Debt...Ch. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Interpreting tho Effects of Salos Declines and...Ch. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Prob. 6.1PCh. 6 - Recording Bad Debts and Interpreting Disclosure of...Ch. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Preparing an Income Statement and Computing the...Ch. 6 - Prob. 6.5PCh. 6 - Prob. 6.6PCh. 6 - Prob. 6.7PCh. 6 - Reporting Net Sales and Expenses with Discounts,...Ch. 6 - Prob. 6.2APCh. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Prob. 6.4APCh. 6 - Prob. 6.5APCh. 6 - Prob. 6.1CONCh. 6 - Finding Financial Information Refer to the...Ch. 6 - Finding Financial Information Refer to the...Ch. 6 - Prob. 6.3CPCh. 6 - Prob. 6.4CPCh. 6 - Prob. 6.5CP
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