Question

In: Accounting

Minta Corporation is a leading manufacturer of sports apparel, shoes, and equipment. The company’s 2017 financial...

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:
Accounts receivable, net $ 4,117 $ 3,681
Income statements:
Sales revenue $ 35,590 $ 33,616


A note disclosed that the allowance for uncollectible accounts had a balance of $27 million and $51 million at the end of 2017 and 2016, respectively. Bad debt expense for 2017 was $48 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.
______________________________________________________________________________________________________

1.

2017 2016
Accounts receivable, gross


2.

Bad debt write-offs   

3.
Accounts Receivable (gross)
Beg. bal.         
End. bal.


4.

Accounts Receivable (net)
Beginning (net) accounts receivable
  
Ending (net) accounts receivable $0

Solutions

Expert Solution

1 2017 2016
Account Receivable, Net $      4,117 $      3,681
Add: Allowance for uncollectible accounts $           27 $           51
Account Receivable, Gross $      4,144 $      3,732
2 Bad Debt Write-offs (51+48-27) $           72
3 Accounts Receivable (gross)
Beg. Bal. $        3,732
Sales $      35,590
$      35,106 Collections
$             72 Write-offs
End. Bal. $        4,144
4
Accounts Receivable (net)
Beginning (net) accounts receivable (1) $    3,681
Add: Credit Sales (2) $ 35,590
Less:
     Bad debts expense (3) 48
       Cash Collected (1)+(2)-(3)-(4) $       35,106
Ending (net) accounts receivable (4) $    4,117

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