MGM Resorts International (MGM) owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts recelvable of $712,263,000 and allowance for doubtful accounts of $128,348,000. Johnson & Johnson (JNJ) manufactures and sells a wide range of healthcare products including Band-Alds and Tylenol. As of a recent year, J8J reported accounts receivable of $15,513,000,000 and allowance for doubtful accounte of $230,000,000. a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM. Round your answer to one decimal place. % b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for 38a, Round your answer to one decimal place. % c. Possible reasons for the difference in the two ratios computed in (a) and (b) include: a. Casino operators historically lose money on operations. b. Casino operators have larger accounts receivable. c. Individuals who may have adequate creditworthiness could overextend themselves and lose more than they can afford if they get caught up in the excitement of gambling. d. Casino operotions experience greater bad debt risk because it is difficult to control the creditworthiness of customers entering the casino. Nature of uncollectible accounts MGM Resorts International (MGM) owns and operates hoteis and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $712,263,000 and allowance for doubtful accounts of $128,348,000. Johnson \& Johnson (JNJ) manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, 38J reported accounts receivable of $15,513,000,000 and allowance for doubtful accounts of $230,000,000. a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM. Round your answer to one decimal place. x% b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for 380 . Round your answer to one decimal place. x% c. Possible reasons for the difference in the two ratios computed in (a) and (b) include: a. Casino operators historically lose money on operations. b. Casino operators have targer accounts receivable. c. Individuals who may have adequate creditworthiness could overextend themselves and lose more than they can afford if they get caught up in the excitement of gambling. d. Casino operations experience greater bad debt risk because it is difficuit to control the creditworthiness of customers entering the cosino
