Question

In: Accounting

Symantec Corp., located in Cupertino, California, is one of the world's largest producers of security and...

Symantec Corp., located in Cupertino, California, is one of the world's largest producers of security and systems management software. The company's consolidated balance sheets for the 2009 and 2008 fiscal years included the following ($ in thousands):

   2009 2008
  Current assets:
  Receivables, less allowances of $23,471 in
      2009 and $25,794 in 2008 $ 840,210 $ 759,800
A disclosure note accompanying the financial statements reported the following ($ in thousands):
Year Ended
2009 2008
(In thousands)
  Trade accounts receivable, net:
     Receivables $ 863,681 $ 785,594
     Less: allowance for doubtful accounts (9,103 ) (9,155 )
     Less: reserve for product returns (14,368 ) (16,639 )
       Trade accounts receivable, net: $ 840,210 $ 759,800

     Assume that the company reported bad debt expense in 2009 of $3,100 and had products returned for credit totaling $3,395 (sales price). Net sales for 2009 were $6,229,800 (all numbers in thousands).

Required:
1.

What is the amount of accounts receivable due from customers at the end of 2009 and 2008? (Enter your answers in thousands.)

2009 2008
  Accounts receivable $ $
2.

What amount of accounts receivable did Symantec write off during 2009? (Enter your answer in thousands.)

Accounts receivable write off $
3.

What is the amount of Symantec's gross sales for the 2009 fiscal year? (Enter your answer in thousands.)

  Gross sales $
4.

Assuming that all sales are made on a credit basis, what is the amount of cash Symantec collected from customers during the 2009 fiscal year? (Enter your answer in thousands.)

  Cash collections $

  

Solutions

Expert Solution

Answer 1

Accounts receivable due

= Trade accounts receivable (gross) [ ie before the deduction of allowance for doubtful accounts & reserve for product returns]

  • For 2009 = $863,681
  • For 2008 = $785,594

​Answer 2

We know , Allowance for doubtful accounts = Opening balance + Bad debt expense - Accounts receivable write off

or, $9,103 = $9,155 + $3,100 -   Accounts receivable write off

therefore ,   Accounts receivable write off in 2009 = $3,152

Answer 3

We know , Reserve for Product Returns = Opening balance + Return expense -  Products returned

$14,368 = $16,639 + Return expense - $3,395

Return expense = $1,124

Gross sales = Net Sales + Return expense = $6,229,800 + $1,124 = $6,230,924.

Answer 4

Accounts Receivable in 2009

= Opening bal + Gross sales - Product Returns - Accounts receivable written off  - Cash collections

$863,681 = $785,594 + $6,230,924 - $3,395 - $3,152 -  Cash collections

Cash collections in 2009 = $6,146,290


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