Question 1 Not complete Marked out of 10.00 P Flag question Estimating Uncollectible Accounts and Reporting Accounts Receivable LaFond Company analyzes its accounts receivable at December 31, and arrives at the age categories below along with the percentages that are estimated as uncollectible. Accounts Estimated Age Group Receivable Loss % 0-30 days past due $ 80,000 1 1% 31-60 days past due 20,000 2 61-120 days past due 14,000 121-180 days past due 6,000 10 Over 180 days past due 4,000 25 Total accounts receivable $ 124,000 5 The balance of the allowance for uncollectible accounts is $450 on December 31, before any adjustments. (a) What amount of bad debts expense will LaFond report in its income statement for the year? $ 0 (b) Use the financial statement effects template to record LaFond's bad debts expense for the year, Use negative signs with your answers, when appropriate. Balance Sheet Income Statement Noncash Contributed Earned Transaction Cash Asset + Assets - Liabilities + Capital Capital Revenue Expenses - Net Income Record bad debts expense 0 0 0 0 0 0 D 0 (c) What is the balance of accounts receivable on it December 31 balance sheet? $ 0 Question 2 Not complete Marked out of 13.00 P Flag question Interpreting the Accounts Receivable Footnote Hewlett-Packard Company reports the following in its 2015 10-K report. October 31 (in millions) 2015 2014 Accounts receivable $13,363 $13,832 Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts. For the fiscal years ended October 31 (in millions) 2015 2014 2013 Allowance for doubtful accounts-accounts receivable Balance, beginning of period $232 $332 $464 Provision for doubtful accounts 46 25 23 Deductions, net of recoveries (89) (125) (155) Balance, end of period $189 $232 $332 (a) What is the gross amount of accounts receivables for Hewlett-Packard in fiscal 2015 and 2014? ($ millions) 2015 Gross accounts receivable 0 0 2014 (b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2015 and 2014? (Round your answers to two decimal places.) (5 millions) 2015 2014 Percentage of uncollectible accounts to gross accounts receivable 0% 0 % (C)What amount of bad debts expense did Hewlett-Packard report each year 2013 through 2015 (ignore increase in allowance from acquisitions)? What amount was actually written off? 2015 2014 2013 ($ millions) Bad debt expense $ Amounts actually written off $ 0 $ 0 $ 0 0 $ 0 $ 0 Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off? Generally, HP has overestimated its accruals, which has deflated profit by the over-accrual of bad debts. Generally, HP has underestimated its accruals, which has inflated profit by the under-accrual of bad debts. The difference between bad debt expense and write-off during the three years is insignificant so it appears that profit has been fairly stated. The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported. (d)Compute Hewlett-Packard's write-offs as a percentage of the allowance account at the beginning of the year. (Round your answers to two decimal places) 2015 write-offs as a percentage of beginning of year allowance: 0 % 2014 write-offs as a percentage of beginning of year allowance: 0 % Question 3 Not complete Marked out of 11.00 P Flag question Interpreting Accounts Receivable and Related Footnote Disclosure Following is information from the Fitbit Inc, financial statements, $ thousands Dec. 31, 2018 Dec 31, 2017 Dec 31, 2016 Revenue $1,511,983 $1,615,519 $2.169,461 Accounts receivable, net 414,209 406,019 477,825 Allowance for Doubtful Accounts ($ thousands) 2018 2017 2016 Beginning balance $9,229 $282 $1,825 Increases 56 30,551 339 Write-offs (5,543) (21,604) (1,882) Ending balance $3,742 $9,229 $282 Customer Bankruptcy In September 2017, Wynit Distribution filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Wynit was the Company's largest customer, historically representing 11% of total revenue during the six months ended July 1, 2017 and 19% of total accounts receivables as of July 1, 2017. In connection with Wynit's bankruptcy filing, the Company believed that the collectability of the product shipments to Wynit during the third quarter of 2017 was not reasonably assured. However, as of July 1, 2017, collectability of accounts receivables from Wynit was reasonably assured. The Company ceased to recognize revenue from Wynit, which totaled $8.1 million during the third quarter of 2017. Additionally, the Company recorded a charge of $35.8 million during the third quarter ended September 30, 2017 comprised of cost of revenue of $5.5 million associated with shipments to Wynit in the third quarter of 2017 and bad debt expense of $30.3 million associated with all of Wynit's outstanding accounts receivables. Required a. What amount do customers owe Fitbit at each of the year-ends 2016 through 2018? $ thousands Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Accounts receivable, gross 0 0 0 b. What percentage of its total accounts receivable does Fitbit deem uncollectible? (Hint: Percentage of uncollectible accounts = Allowance for uncollectible accounts/Gross accounts receivable.) Note: Round answers to one decimal place (example: 0.2345 = 23.5%). Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 0 % 0 % 0 % % allowance / AR gross C. What amount of bad debts expense did Fitbit report in its income statement for each of the years 2016 through 2018? (Hint: Calculate the common-size expense.) Note: Round answers to one decimal place (example: 0.2345 = 23.5%). Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 0% 0 % 0 % % Bad debt expense / Revenue e. Calculate the average number of days that it took Fitbit to collect its receivables during 2018 and 2017. Note: Do not round computations until your final answer, then round to one decimal place. Dec. 31, 2018 Dec. 31, 2017 Days sales outstanding 0 0