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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Classifications of receivables

Boeing is one of the world’s major aerospace firms with operations involving commercial aircraft, military aircraft, missiles, satellite systems, and information and battle management systems. As of a recent year, Boeing had $4,864 million of receivables involving U.S. government contracts and $2,250 million of receivables involving commercial aircraft customers such as Delta Air Lines and United Airlines.

Should Boeing report these receivables separately in the financial statements or combine them into one overall accounts receivable amount? Explain.

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To explain: Whether Company B’s financial statement should report its receivables from government of Country US and from commercial aircrafts separately or combine them into overall accounts receivable amount.

Explanation

Company B should report its total amount of receivables (receivables from government of Country US plus receivables from commercial aircrafts) in the balance sheet...

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