Question

Minta Corporation is a leading manufacturer of sports apparel, shoes, and equipment. The company's 2017 financial statements contain the following information ($ in millions): 2017 2016 Balance sheets: $ 4,011 Accounts receivable, net Income statements $ 4,447 Sales revenue $36,520 $34,546 A note disclosed that the allowance for uncollectible accounts had a balance of $33 million and $57 million at the end of 2017 and 2016, respectively. Bad debt expense for 2017 was $54 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 2017 and 2016? 2. What is the amount of bad debt write-offs during 2017? 3. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2017 4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2017.

Answer 1

Minta Corporation Req 1 2017 2016 Net Accounts Receivable 4,447 4,011 Allowance for Doubtful Accounts 33 57 Gross Accounts Receivable 4,480 4,068 Req 2 Bad debts write offs 2017 As per below ledger accounts 78. Req 3 Cash received from customers As per below ledger accounts 36,030 Req 4 Cash received from customers As per below ledger accounts 36,030 Ledger accounts Gross Accounts Receivable Opening Balance 4,068 Credit sales 36,520 Cash received 36,030 Balancing figure Write offs 78. Bal 4,480 Allowance for Doubtful Accounts Opening Balance 57 Bad debts 54 Balancing figure Write offs 78. Bal 33 Net Accounts Receivable Opening Balance 4,011 Credit sales 36,520 Cash received 36,030 Balancing figure Bad debts 54 78 Write offs Write offs 78. Bal. 4,447