Question

6. At September ​24, 2016​, how much in total did customers owe Mcintosh​? How much did Mcintosh expect to collect and not to collect on September ​24, 2016​? What was the net realizable value of Mcintosh​, ​Inc.'s receivables on September ​24, 2016​?
Mcintosh, Inc.
Balance Sheet (Excerpt, Adapted)
(In Millions of $)
Sep. 24, 2016 Sep. 26, 2015
Current assets:


Cash and cash equivalents $14,801 $19,148
Short-term marketable securities $41,936 $25,598
Accounts receivable, less allowance of $69 and $97, respectively $15,941 $17,758
Inventories $2,129 $2,235
Vendor non-trade receivables $13,132 $13,906
Other current assets $8,243 $15,166
Total current assets $102,287 $107,427

Customers owed Mcintosh, Inc. . . . . . . . . . . . . . . . . . . . . . .­­­­­­­­­­­­­­_______________________
Mcintosh, Inc. expected not to collect . . . . . . . . . . . . . . . . ___________________
Mcintosh, Inc. expected to collect—net realizable value . . . .__________________

Answer 1

On Sep. 24, 2016 $16,010 [$15941 + $69] 1) Customers owed Mcintosh, Inc. $69 2) Mcintosh, Inc. expected not to collect $15,941 3) Mcintosh, Inc. expected to collect - net realizable value Reason: Customers owed Mcintosh, Inc. denotes the gross accounts receivable. On balance sheet, net amount receivable is reported by subtracting allowance account balance from gross receivables. Therefore, customers owed Mcintosh Inc. is calculated by adding allowance balance to net realizable value reported on balance sheet In other words, balance in allowance account denotes receivables that are expected not to collect. Therefore, it is deducted from total accounts receivable to report net expected amount to collect as net realizable value on balance sheet