Question

Macrosoft develops, produces, and markets a wide range of computer software On its recent financial statements, Macrosoft reported the following information about net sales revenue and accounts receivable amounts in millions). Current Prior Year Year Accounts receivable, net of allowances of $136 and $122$ 13,989 $ 11,038 Net sales revenue 60,720 52,622 According to its Form 10-K, Macrosoft recorded bad debt expense of $91 and there were no bad debt recoveries during the current year. (Hint Refer to the summary of the effects of accounting for bad debts on the Accounts Receivable (Gross) and the Allowance for Doubtful Accounts T-accounts. Use the T-accounts to solve for the missing values.) Required: 1. What amount of bad debts was written off during the current year? 2. Based on your answer to requirement (1) solve for cash collected from customers for the current year, assuming that all of Macrosoft's sales during the period were on open account. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What amount of bad debts was written off during the current year? (Enter your answers in millions not in dollars.) Allowance for Doubtful Accounts Beg bal End bal Required 2 >

Answer 1

1.

Allowance for Doubtful Assets
		$             122.00	Beg Bal
Accounts Receivable	$             77.00	$               91.00	Bad Debt Expense
		$             136.00	End Bal

Bad Debt written off = $77 i.e. $122+91-136

2.

Accounts Receivable
Beg Bal	$     11,160.00		Beg Bal
Sales Revenue	$     60,720.00	$               77.00	Allowance for Doubtful Debts
		$        57,678.00	Cash
End Bal	$     14,125.00		End Bal

Cash Collected from Customers = $57678 i.e. $11160+60720-14125-77