Question

mert Jordan, Inc. is a leading manufacturer of sports apparel shoes and equipment. The company's 2015 financial statements contain the following information (in millions Balance sheets: Accounts receivable, net 5 3,227 $ 3.242 A note disclosed that the allowance for uncollectible accounts had a balance of $106 million and $93 million at the end of 2015 and 2014, respectively. Bad debt expense for 2015 was $34 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 at 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 4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2015 Answer is complete but not entirely correct Complete this question by entering your answers in the tabs below. Required 1 required > Roured > Required o ved from customers during Analyse charges in the gross accounts receivable account to sliculate the amount of ch 2015. Enter your answers in ons.) Gross Accounts Receivable 25.623 25,591 34 W Collections atts Required 2 Required )

Answer 1

SOLUTION

1.

Particulars	2015	2014
Accounts receivable, net (A)	3,227	3,242
Allowance for uncollectible accounts (B)	106	93
Gross Accounts receivable (A+B)	3,333	3,335

2.

	2015 (Amount in millions)
Opening balance of uncollectible accounts (A)	93
Bad debts during the year (B)	34
Closing balance of uncollectible accounts (C)	106
Bad debts write off during the year (A+B-C)	21

3.

	2015
Opening gross account receivable	3,335
Add: Credit sales	25,623
Less: Bad debts write off	(34)
Less: Closing gross account receivable	(3,333)
Cash collect during the year	25,591

4.

	2015
Opening net account receivable	3,242
Add: Credit sales	25,623
Less: Bad debts write off	(34)
Less: Closing net account receivable	(3,227)
Cash collect during the year	25,604