Sprint’s Uncollectibles The following selected information is taken from the financial statements of Sprint Corporation (in millions of dollars):

Based on the information from Sprint’s financial statements, answer the following questions:

a. What percentage of total accounts receivable is considered uncollectible in each of the three years presented?

b. What percentage of sales is bad debt expense in each of the three years presented?

c. Did Sprint’s collection of accounts receivable improve over the 3-year period? Explain.

d. The cloning of cellular phones currently is a serious problem. Cloning involves copying access/billing codes from cellular phones belonging to others. Cellular phone companies typically absorb charges for unauthorized calls on cellular phones, amounts involving many millions of dollars. If cloning continues to be a problem as cellular business grows, how would this affect the financial statements of a company like Sprint?

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1998 1997 1996 Accounts Receivable (net) 2,384.3 2,495.6 2,495.6 2,343.6 Allowance for Doubtful Accounts 174.8 146.7 117.4 Accounts Written Off 339.4 363.6 255.4 Uncollectible Accounts Expense 364.9 388.9 248.5 Net Operating Revenues 16,016.9 14,873.9 13,887.5