In: Accounting
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 | $ |
Answer 1
Accounts receivable due
= Trade accounts receivable (gross) [ ie before the deduction of allowance for doubtful accounts & reserve for product returns]
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