Problem

Industry Characteristics and Allowances for Doubtful AccountsThe following percentages wer...

Industry Characteristics and Allowances for Doubtful Accounts

The following percentages were computed using figures from recent annual reports of Weis Markets, a large grocery store chain, and Sprint Nextel Corporation, a provider of telecom­munication services:

 

Weis

Sprint

Allowance for doubtful accounts as a percentage of net sales

0.04%

1.1%

Accounts receivable as a percentage of net sales

2.1

10.5

Explain why Sprint's percentages are so much larger than Weis Markets' percentages.

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