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Green Technologies is a leading global end - to - end technology provider, with a portfolio of hardware, software and service solutions. In a recent
Green Technologies is a leading global endtoend technology provider, with a portfolio of hardware, software and service solutions. In a recent annual report, the balance sheet included the following information $ in millions:
Current assets:
Receivables, less allowance of $ in $ $
and $ in
In addition, the income statement reported sales revenue of $ million for the current year. All sales are made on a credit basis. The statement of cash flows indicates that cash collected from customers during the current year was $ million. There could have been significant recoveries of accounts receivable previously written off.
Required:
Compute the following $ in millions:
The amount of bad debts written off by Green during Hint: Treat it as a plug in the gross accounts receivable account
The amount of bad debt expense that Green included in its income statement for Hint: Treat it as a plug in the allowance for uncollectible accounts
The approximate percentage that Green used to estimate bad debts for assuming that it used the income statement approach.
Suppose that Green had used the direct writeoff method to account for bad debts. Compute the following $ in millions:
The accounts receivable information that would be included in the yearend balance sheet.
The amount of bad debt expense that Green would include in its income statement.
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