Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gemstone Products located in New York City, is one of the world's largest producers of beauty and related products. The company's consolidated balance sheets for

Gemstone Products located in New York City, is one of the world's largest producers of beauty and related products. The company's consolidated balance sheets for the 2016 and 2015 fiscal years included the following ($ in thousands):

20162015Current assets:Receivables, less allowances of $131,875 in 2016 and $87,475 in 2015$ 459,900$ 440,500

A disclosure note accompanying the financial statements reported the following ($ in thousands)

Year Ended2016 (In thousands)2015 (In thousands)Calculation of account receivables, net:Receivables$ 591,775$ 527,975Less: allowance for doubtful accounts(122,975)(77,675)Less: reserve for product returns(8,900)(9,800)Trade accounts receivable, net:$ 459,900$ 440,500

Assume that the company reported bad debt expense in 2016 of $191,500 and had products returned for credit totaling $187,075 (sales price). Net sales for 2016 were $5,603,800 ($ in thousands).

Required:

  1. What is the amount of accounts receivable due from customers at the end of 2016 and 2015?
  2. What amount of accounts receivable did Gemstone write off during 2016?
  3. What is the amount of Gemstone's gross sales for the 2016 fiscal year?
  4. Assuming that all sales are made on a credit basis, what is the amount of cash Gemstone collected from customers during the 2016 fiscal year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Passive Activity Loss IRS Audit Technique Guide

Authors: Internal Revenue Service

1st Edition

1304114325, 978-1304114327

More Books

Students also viewed these Accounting questions