Question

Nike, Inc is a leading manufacturer of sports apparel shoes, and equipment. The company's 2015 financial statements contain the following information in millions $ 1,358 3,44 Balance sheets Accounts receivable, net Income statements: Sales revenue $30,681 $27,799 A note disclosed that the bllowance for uncollectible accounts had a balance of $7 million and $7 million at the end of 2015 and 2014 respectively. Bad debt expense for 2015 was $20 million Assume that all sales are made on a credit basis Required: 1. What is the amount of gross (total) accounts receivable due from customers of the end of 2015 and 2017 2 What is the amount of bad debt write-offs during 2015? 3. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2015 4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2015 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Red 3 Required 4 Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2015. Entrar answers in millions. Decreases should be indicated by a minus sign et Accounts Receivab Beginning net accounts receive 3.434 te onts < Required 3

Answer 1

SOLUTION

1.

Particulars	2015	2014
Accounts receivable, net (A)	3,358	3,434
Allowance for uncollectible accounts (B)	78	78
Gross Accounts receivable (A+B)	3,436	3,512

2.

	2015 (Amount in millions)
Opening balance of uncollectible accounts (A)	78
Bad debts during the year (B)	20
Closing balance of uncollectible accounts (C)	78
Bad debts write off during the year (A+B-C)	20

3.

	2015
Opening gross account receivable	3,512
Add: Credit sales	30,601
Less: Bad debts write off	(20)
Less: Closing gross account receivable	(3,436)
Cash collect during the year	30,657

4.

	2015
Opening net account receivable	3,434
Add: Credit sales	30,601
Less: Bad debts write off	(20)
Less: Closing net account receivable	(3,358)
Cash collect during the year	30,657