Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable

At December 31, 2020, its annual year-end, the accounts of Sun Systems Inc. show the following.

1. Sales revenue for 2020, $900,000, of which one-sixth was on account.
2. Allowance for doubtful accounts, balance December 31, 2019, $4,500 credit.
3. Accounts receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2020), $90,250.
4. Uncollectible accounts to be written off, December 31, 2020, $5,250.
5. Aging schedule at December 31, 2020, showing the following breakdown of total accounts receivable, excluding amounts to be written off.

Required

a. Prepare the 2020 entry to write off the uncollectible accounts.

b. Prepare the 2020 adjusting entry to record bad debt expense for each of the following separate assumptions concerning expected bad debt loss rates. Note: Treat each of the following scenarios separately, they are independent of one another.

1. Bad debt expense is based on credit sales, 1.5%. (Hint: See p. 8-19: Alternative to Estimating Net Realizable Value)

2. The Allowance for Doubtful accounts is based on total receivables at year-end, 2.5%.

3. The Allowance for Doubtful accounts is based on aging schedule: not past due, 0.5%; past due 1–60 days, 1%; and past due over 60 days, 8%.

4. Bad debt expense is based on direct write-off method (assume entry in part a has not been recorded).

c. Prepare the 2020 balance sheet disclosure relating to accounts receivable for each assumption 1 through 4 of part b.

a.

b. Note: Treat each scenario separately, they are independent of one another.

1.

2.

3.

4.

c.  

Note: Do not use negative signs with your answers.

Case Incident: Organizational Leveraging of Social Media

As you know, social media have transformed the way we interact. The transparent, rapid-fire communication they make possible means people can spread information about companies more rapidly than ever.

Do organizations understand yet how to use social media effectively? Perhaps not. Recent findings indicated that only three out of ten CEOs in the Fortune 500 have any presence on national social media sites. Many executives are wary of these new technologies because they cannot always control the outcomes of their communications. However, whether they are directly involved with social media or not, companies should recognize that these messages are out there, so it behooves them to make their voices heard. Some experts say social media tools improve productivity because they keep employees connected to their companies during non-office hours. And social media can be an important way to learn about emerging trends. André Schneider, chief operating officer of the World Climate Ltd, uses feedback from LinkedIn discussion groups and Facebook friends to discover emerging trends and issues worldwide. Padmasree Warrior, chief technology officer of Cisco, has used social media to refine her presentations before a “test” audience.

The first step in developing a social media strategy is establishing a brand for your communications—define what you want your social media presence to express. Experts recommend that companies begin their social media strategy by leveraging their internal corporate networks to test their strategy in a medium that’s easier to control. Most companies already have the technology to use social media through their corporate websites. Begin by using these platforms for communicating with employees and facilitating social networks for general information sharing. As social networking expert Soumitra Dutta from Insead notes, “My advice is to build your audience slowly and be selective about your contacts.”

Despite the potential advantages, companies also need to be aware of significant drawbacks to social media. First, it’s very difficult to control social media communications. Microsoft found this out when the professional blogger it hired spent more time promoting himself than getting positive information out about the company. Second, important intellectual capital might leak out. Companies need to establish very clear policies and procedures to ensure that sensitive information about ongoing corporate strategies is not disseminated via social media. Finally, managers should maintain motivation and interest beyond their initial forays into social media. A site that’s rarely updated can send a very negative message about the organization’s level of engagement with the world.

Sources: B. Acohido, “Social-Media Tools Boost Productivity,” USA Today, August 13, 2012, 1B; H. Annabi and S. T. McGann, “Social Media as the Missing Links: Connecting Communities of Practice to Business Strategy,” Journal of Organizational Computing and Electronic Commerce 23, no. 1-2 (2013): 56–83; S. Dutta, “What’s Your Personal Social Media Strategy,” Harvard Business Review, November 2010, 127–30; and G. Connors, “10 Social Media Commandments for Employers,” Workforce Management Online, February 2010, www.workforce.com; and L. Kwoh and M. Korn, “140 Characters of Risk: CEOs on Twitter,” The Wall Street Journal, September 26, 2012, B1, B8.

Discussion Questions

Are the drawbacks of the corporate leveraging of social media sufficient to make you think it’s better for them to avoid certain media? If so, which media?

What features would you look for in a social media outlet? What types of information would you avoid making part of your social media strategy?

What do you think is the future direction of social media in business? How might emerging technologies change your forecast?

HelloFresh is at the forefront of disrupting a multi trillion-dollar industry at the very beginning of its
online transition. HelloFresh is a truly local food product, uniquely suited to individual tastes and
meal-time preferences offering delivery of a giant box of delicious food with recipes to enable easy
and enjoyable meal preparation for a weekly fee.
HelloFresh aims to provide each and every household in its 7 markets with the opportunity to
enjoy wholesome home-cooked meals with no planning, no shopping, and no hassle required. Everything
required for weeknight meals, carefully planned, locally sourced and delivered to your door at
the most convenient time for each subscriber. Behind the scenes, a huge data driven technology platform
puts us in the prime position for disrupting the food supply chain and for fundamentally changing
the way consumers shop for food. HelloFresh has local founders across the globe who are able to
leverage the global platform, and at the same time ensure that the HelloFresh product in each market
truly reflects the local community.

The soft subscription model business enables us to leverage our weekly subscriber touch points to
consistently manage supply chains and demand, and to optimize the customer experience as well as
our business economics. Customers sign-up for a box containing between 2 and 5 meals per week
for a flat fee. If the customer is out of town or unavailable he can easily cancel any week without a
penalty provided they notify HelloFresh in advance.
Dominik Richter has been CEO since starting HelloFresh in 2011. He has responsibility for keeping
a general oversight of the business and strategy. Prior to HelloFresh, Dominik worked with Goldman
Sachs in London. Dominik graduated with a degree in International Business in 2009, and from the
London School of Economics in 2010 with a Masters in Finance.
Thomas Griesel has been responsible for the logistics and operations behind HelloFresh since
founding with Dominik in 2011. Previously, Thomas had spent time at OC&C Strategy Consultants and
worked on a range of his own businesses and ideas. He graduated from with a degree in International
Business Administration in 2009, and from the London Business School in 2010 with a Masters in
Management.

2011
All the way back in 2011, Dominik and Thomas arrived in Berlin, intent on starting a new and disruptive
business. With a love of healthy food, nutrition, cooking, and a desire to make access to healthy food
as easy as possible for as many people as possible - starting a Food at Home business seemed the
natural choice.
2012
After examining business models from Sweden to Japan to very local ideas, they and a group of
like-minded individuals formulated the recipe for HelloFresh. The team started early in 2012 packing
shopping bags in Berlin, Amsterdam and London with a view to target the highest density population
areas in Europe. Quite quickly, they started getting requests from people outside those areas who all
wanted to become a part of the HelloFresh family. Wanting to serve as many people as possible, the
team developed a logistics model that enabled them to deliver to every single household across a
given country.
2013
The HelloFresh product started to rapidly gain in popularity, as subscribers shared the excitement
about their weekly boxes, with friends and colleagues. Subscriber referrals accelerated, as it became
clear that HelloFresh had finally solved the “What’s for dinner tonight” problem for its subscribers.
2014
Having launched on the East Coast of the U.S in December 2012, HelloFresh moved to cover the
entire country in September 2014. Over the short time since then, HelloFresh has grown rapidly to
become one of the largest players in this market.

Questions
1. Do you consider HelloFresh a form of disruptive or sustaining technology?
2. Is HelloFresh an example of Web 1.0 (ebusiness) or Web 2.0 (Business 2.0)?
3. Describe the ebusiness model associated with HelloFresh.
4. Describe the revenue model associated with HelloFresh.

HelloFresh is at the forefront of disrupting a multi trillion-dollar industry at the very beginning of its
online transition. HelloFresh is a truly local food product, uniquely suited to individual tastes and
meal-time preferences offering delivery of a giant box of delicious food with recipes to enable easy
and enjoyable meal preparation for a weekly fee.
HelloFresh aims to provide each and every household in its 7 markets with the opportunity to
enjoy wholesome home-cooked meals with no planning, no shopping, and no hassle required. Everything
required for weeknight meals, carefully planned, locally sourced and delivered to your door at
the most convenient time for each subscriber. Behind the scenes, a huge data driven technology platform
puts us in the prime position for disrupting the food supply chain and for fundamentally changing
the way consumers shop for food. HelloFresh has local founders across the globe who are able to
leverage the global platform, and at the same time ensure that the HelloFresh product in each market
truly reflects the local community.

The soft subscription model business enables us to leverage our weekly subscriber touch points to
consistently manage supply chains and demand, and to optimize the customer experience as well as
our business economics. Customers sign-up for a box containing between 2 and 5 meals per week
for a flat fee. If the customer is out of town or unavailable he can easily cancel any week without a
penalty provided they notify HelloFresh in advance.
Dominik Richter has been CEO since starting HelloFresh in 2011. He has responsibility for keeping
a general oversight of the business and strategy. Prior to HelloFresh, Dominik worked with Goldman
Sachs in London. Dominik graduated with a degree in International Business in 2009, and from the
London School of Economics in 2010 with a Masters in Finance.
Thomas Griesel has been responsible for the logistics and operations behind HelloFresh since
founding with Dominik in 2011. Previously, Thomas had spent time at OC&C Strategy Consultants and
worked on a range of his own businesses and ideas. He graduated from with a degree in International
Business Administration in 2009, and from the London Business School in 2010 with a Masters in
Management.

2011
All the way back in 2011, Dominik and Thomas arrived in Berlin, intent on starting a new and disruptive
business. With a love of healthy food, nutrition, cooking, and a desire to make access to healthy food
as easy as possible for as many people as possible - starting a Food at Home business seemed the
natural choice.
2012
After examining business models from Sweden to Japan to very local ideas, they and a group of
like-minded individuals formulated the recipe for HelloFresh. The team started early in 2012 packing
shopping bags in Berlin, Amsterdam and London with a view to target the highest density population
areas in Europe. Quite quickly, they started getting requests from people outside those areas who all
wanted to become a part of the HelloFresh family. Wanting to serve as many people as possible, the
team developed a logistics model that enabled them to deliver to every single household across a
given country.
2013
The HelloFresh product started to rapidly gain in popularity, as subscribers shared the excitement
about their weekly boxes, with friends and colleagues. Subscriber referrals accelerated, as it became
clear that HelloFresh had finally solved the “What’s for dinner tonight” problem for its subscribers.
2014
Having launched on the East Coast of the U.S in December 2012, HelloFresh moved to cover the
entire country in September 2014. Over the short time since then, HelloFresh has grown rapidly to
become one of the largest players in this market.

Questions
1. Do you consider HelloFresh a form of disruptive or sustaining technology?
2. Is HelloFresh an example of Web 1.0 (ebusiness) or Web 2.0 (Business 2.0)?
3. Describe the ebusiness model associated with HelloFresh.
4. Describe the revenue model associated with HelloFresh.

Mention three (3) uses of business technology which could be used to manage your plan and schedule. this is regrding about nurses

Consider a Robinson Crusoe economy with increasing returns to scale technology and the preference is such that coconut and leisure are perfect complements. Draw this economy on a diagram.

Explain how computerized medical records will improve health care delivery.

Explain how will healthcare information technology improves healthcare?

What do economists mean when they describe management as a “technology” and why might management quality vary across firms and sectors?

Explain how the external environment, organizational size technology, and strategy are relevant in the design or the an organizational structure where you have worked.