Question

Could you tell how to get correct cash collections and how my ans. is incorrect?

Problem 8-12 Integrating problem; inventories and accounts receivable: Chapters 7 and 8 (L08-4, 8-6. 8- Inverness Steel Corporation is a producer of flot rolled carbon stainless and electrical stats and tubular products The company's Income statement for the 2018 fiscal year reported the following information in m ors Cost of foods sold The company's balance sheets for 2018 and 2017 included the following information in mi Accounts receivable, net 572 5670 The statement of cash flows reported bed debt exponse for 2018 of $7 million. The summary of significant accounting policies included the following notes is in millions Accounts Receivable in part) The allowance for uncollectible accounts was 55 and 56 at December 31, 2018 and 2017, respectively All sales are on credit Inventories Inventories are valued at the lower of cost or market The cost of the majority of inventaries is measured using the last in first out ILIFO method. Other inventores are measured principal at vorage cost and cons mostly of foreign inventories and certain materials. If the entire inventory had been valued on an average con basis, rentory would have beon higher by $560 and $410 at the end of 2018 and 2017 rospectively. During 2018, 2017 and 2016, liquidation of LIFO layers generated income of 58, 59, and $27, respectively 1. Determine the amount of accounts receivable Inverness wrote off during 2018 (Enter your answer in millions.) 2. Calculate the amount of cash collected from customers during 2018. Enter your answer in millions) 3. Calculate what cost of goods sold would have been for 2018 if the company had used average cost to volue its entire inventory Enter your answer in m ons.) 4. Calculate the receivables turnover roti, the inventory turnover ratio, and the gross profero for 2018 (Round Receivables turnover ratio" and "inventory turnover ratio answers to 2 decimal places. Round "Gross profiteretio answer to nearest percen tie. 0.123 needs to be entered as 12%).) Answer is complete but not entirely correct. l milion 1 2 3 4 4b 46. Accounts receivable wi Cash Collections Coul of sold Rece tumoverato Inventory turnover ratio Dross proftrato S0191 5850 1045 6721

Answer 1

$ 6 Allowance for doubtful debts Accounts receivables $ 4 Beginning balance Written off (Balance figure-Written off) | Bad debts expense Ending balance $ 9 $ 13 $ 13 Beginning balance $ 4 $6,893 Accounts receivables $ 626 Allowance for doubtful debts Cash $ 7,000 (Balance figure-Cash collected) Ending balance $ 7,626 Sales revenue $ 729 $ 7,626 2017 620 2018 720 $ $ Accounts receivables Add Allowance for doubtful debts or doubtful dabte 6 Beginning balance (gross) 9 $ 626 $ 729 Cash collected is $ 6893