Question

AT&T's financial statements for the 2010 and 2009 fiscal years contained the following information: 2010 2009 Balance Sheets ($ in millions) Current assets: Accounts receivable, net of allowances for doubtful accounts of $957 and $1.202 $13.610 $14,845 Income Statements ($ in millions) Revenues 2010 $124,280 2009 $122.513 In addition, the firm disclosed bad debt expenses of $1,334 million in 2010 and $1,762 million in 2009. Required: a. Determine the amount of actual write-offs made during 2010. [1 point] b. Determine the amount of cash collected from customers during 2010. [1 point)

Answer 1

• Requirement [a]

A	Allowance account - 2010 Beginning	$1,202
B	Bad Debt Expense -2010	$1,334
C	Allowance account - 2010 Ending balance	$957
D = A+B - C	Actual Write offs during 2010	$1,579	Answer

• Working

		2010	2009
A	Accounts receivables, net	$13,610	$14,845
B	Allowance for Doubtful accounts	$957	$1,202
C = A+B	Accounts receivables, gross	$14,567	$16,047

• Requirement [b]

A	Accounts receivables - 2010 Beginning	$16,047
B	Revenues - 2010	$124,280
C	Accounts receivables - 2010 Ending	$14,567
D = A+B - C	Amount of Cash collected in 2010	$125,760	Answer