Question
Problem 7-3 Bad debts; Jordan, Inc. [LO7-5] Jordan, Inc., is a leading manufacturer of sports apparel, shoes, and equipment. The companys 2015 financial statements contain
Problem 7-3 Bad debts; Jordan, Inc. [LO7-5]
Jordan, Inc., is a leading manufacturer of sports apparel, shoes, and equipment. The companys 2015 financial statements contain the following information (in millions):
2015 | 2014 | ||||
Balance sheets: | |||||
Accounts receivable, net | $ | 3,172 | $ | 3,187 | |
Income statements: | |||||
Sales revenue | $ | 25,468 | $ | 23,486 | |
A note disclosed that the allowance for uncollectible accounts had a balance of $105 million and $92 million at the end of 2015 and 2014, respectively. Bad debt expense for 2015 was $33 million. Assume that all sales are made on a credit basis. Required: 1. What is the amount of gross (total) accounts receivable due from customers at the end of 2015 and 2014? 2. What is the amount of bad debt write-offs during 2015? 3. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2015. 4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2015.
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