Question

Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K report. October 31 (in millions) 2015 2014 Accounts receivable $13,363 $13,832 Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts. 2015 2014 2013 For the fiscal years ended October 31 (in millions) Allowance for doubtful accounts-accounts receivable Balance, beginning of period Provision for doubtful accounts Deductions, net of recoveries Balance, end of period $232 $332 $464 46 25 23 (89) (125) (155) $189 $232 $332 (a) What is the gross amount of accounts receivables for Hewlett-Packard in fiscal 2015 and 2014? ($ millions) 2015 2014 Gross accounts receivable 13,552 14,064 (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.) ($ millions) 2015 2014 Percentage of uncollectible accounts to gross accounts receivable 0% X 0 % X

Answer 1

Account receivable is current asset means amount receivable from customer. The bad debt is written of from the account receivable. The gross account receivable is calculated by adding the account receivable to balance of allowance for doubtful debt account. The bad debt is expenses to the business organisation.

(a) The gross amount of accounts receivable for Hewlett-Packard in tistal 2015 and 2014 is calculated below: Gruss Account Receivable = Account Receivable + Ending balane of allowance fer dabtful Account Gross Account Receivable = year Year 2018(M) & 13363 +$ 189 = $13552 year 201460 & 13832+ 8232 2 5 14064 I million Gross accounts Receivable 2015 13.552 2014 | 14064 (6) The pes centage of the allowance for accounts to gross accounts receivable and 2014 is calculated below! doubtful fa 2015 1% of the allowance for doubtful accounts to gross account receivable = دا اثط 2015 189 2014 232 A) Allowana for doubtful accounts B) Gross account Receivable 13,552 , 14,064 percentage of uncollectable accounts to gross accounts receivable : 2015 T 2014 189 x100 = 1.397 232 x 1002 1.65% SSS 2 -1.39% - 1.65

(C) Amount of bad debt expenses and amount Lot actual written off is calcuated below' million 2015 2014 2013 A Bad debt expenses 89 125 155 125 155 Amount actually writte off Bad debts expense 89 Less: provision (46) for doubtful accounts Amount actually 43 untten off (23) O 192 (d write offs as a percentage of the allowance account at the begining of the year is calculated belowin smillion 2015 2014 unite offs 43 loc Allowanca account at the I 232 332 begining of the year, percent ase of write-offs to the allo wance beging of the year = 2015 2 43 xloo 232 2014 100 xroo Xtoo 332 18.537 = 30.12%