Minta Corporation, is a leading manufacturer of sports apparel, shoes, and equipment. The company’s 2020 financial statements contain the following information ($ in millions): 20202019Balance sheets: Accounts receivable, net$ 2,804$ 4,327Allowance for uncollectible accounts21533Income statements: Sales revenue$ 37,558 Statement of Cash Flows: Amortization, impairment and other399 Decrease in accounts receivable1,240 Assume that all sales are made on a credit basis.Required:What is the amount of gross (total) accounts receivable due from customers at the end of 2020 and 2019?Assume that bad debt expense is included in “amortization, impairment and other,” such that the 2020 decrease in accounts receivable of $1,240 reflects only the difference between sales and collections. Prepare a T account that depicts how sales, collections, bad debt expense, and writeoffs of bad debts affect the balance of net accounts receivable with a debit, a credit or not at all, and estimate Minta’s 2020 bad debt expense.Prepare a T account that depicts how bad debt expense and writeoffs of bad debts affect the balance of the allowance for uncollectible accounts with a debit, credit or not at all, and estimate the amount of bad debts written off by Minta during 2020.Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2020.Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2020.

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Answered: nta Corporation, is a leading…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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	2020	2019
Balance sheets:
Accounts receivable, net	$ 2,804	$ 4,327
Allowance for uncollectible accounts	215	33
Income statements:
Sales revenue	$ 37,558
Statement of Cash Flows:
Amortization, impairment and other	399
Decrease in accounts receivable	1,240

Required:

What is the amount of gross (total) accounts receivable due from customers at the end of 2020 and 2019?
Assume that bad debt expense is included in “amortization, impairment and other,” such that the 2020 decrease in accounts receivable of $1,240 reflects only the difference between sales and collections. Prepare a T account that depicts how sales, collections, bad debt expense, and writeoffs of bad debts affect the balance of net accounts receivable with a debit, a credit or not at all, and estimate Minta’s 2020 bad debt expense.
Prepare a T account that depicts how bad debt expense and writeoffs of bad debts affect the balance of the allowance for uncollectible accounts with a debit, credit or not at all, and estimate the amount of bad debts written off by Minta during 2020.
Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2020.
Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2020.

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