E 6-3

E6-2 Determine due date and interest on notes Determine the due date and the amount of interest due at maturity on the follo wing notes: Date of Note Face Amount Interest Rate Term of Note a. January 15 b. April 1 c. June 22 d. August 30 e. October 16 $50,000 27,000 30,000 90,000 72,000 6% 4 30 days 90 days 45 days 120 days 50 days To simplify, use 360 days per year to compute interest E6-3 Nature of uncollectible accounts MGM Resorts International (MGM) owns and operates casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. For a recent year, the MGM Resorts International re- ported accounts and notes receivable of $562,947,000 and allowance for doubtful accounts of $89,602,000. International Business Machines (IBM) provides information technology services, including software, worldwide. For a recent year, IBM reported notes and accounts receivable of $9,426,000,000 and allowance for doubtful accounts of $336,000,000. a. Compute the percentage of the allowance for doubtful accounts to the accounts and notes receivable for MGM. b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for IBM. c. Discuss possible reasons for the difference in the two ratios computed in (a) and (b). Note: The spreadsheet icon indicates an Excel template is available on the student companion site