27. a. During 2006, Avalon Company recorded baddebt expense of $10,000 and wrote

Question

27. a. During 2006, Avalon Company recorded baddebt expense of $10,000 and wrote off an uncollectible accountreceivable amounting to $15,000. Assuming a January 1, 2006,balance in the allowance for doubtful accounts of $18,000, theDecember 31, 2006, balance in the allowance account would be? b. Oakwood Company had accounts receivable of $750,000 and anallowance for doubtful accounts of the $21,500 just prior towriting off as worthless an account receivable for Hyland Companyof $5,000. The net realizable value of accounts receivable asshown by the accounting record before and after the write-off wasas follows:? c. In 2004, Genentech reported product sales of $10,550million and accounts receivable-trade of $1,461.0 million. In2003, product sales were $8,356 million and accountsreceivable-trade was $1,007.9 million. Their receivablesturnover ratio for 2004 is ? d. In 2004, Genentech reported product salesrevenue of $10,550 million and accounts receivable of $1,461million; in 2003, they reported accounts receivable of $1007.9million. What was the cash flow generated bysales? 27. a. During 2006, Avalon Company recorded baddebt expense of $10,000 and wrote off an uncollectible accountreceivable amounting to $15,000. Assuming a January 1, 2006,balance in the allowance for doubtful accounts of $18,000, theDecember 31, 2006, balance in the allowance account would be? b. Oakwood Company had accounts receivable of $750,000 and anallowance for doubtful accounts of the $21,500 just prior towriting off as worthless an account receivable for Hyland Companyof $5,000. The net realizable value of accounts receivable asshown by the accounting record before and after the write-off wasas follows:? c. In 2004, Genentech reported product sales of $10,550million and accounts receivable-trade of $1,461.0 million. In2003, product sales were $8,356 million and accountsreceivable-trade was $1,007.9 million. Their receivablesturnover ratio for 2004 is ? d. In 2004, Genentech reported product salesrevenue of $10,550 million and accounts receivable of $1,461million; in 2003, they reported accounts receivable of $1007.9million. What was the cash flow generated bysales?

Explanation / Answer

A

Dr.

Cr.

Accounts Receivable

15000

Beginning balance

18000

Bad Debts

10000

Balance

13000

total

28000

28000

Ending balance

$13,000

B

C

(Million)

2003

2004

SALES

8356

10550

A/R

1007.9

1461

D

A

Allowance for doubtfulaccount

Dr.

Cr.

Accounts Receivable

15000

Beginning balance

18000

Bad Debts

10000

Balance

13000

total

28000

28000

Ending balance

$13,000

B

Accounts Receivable $750,000 Allowance for doubtful accounts $21,500 Net Realizable value before write-off $728,500 (750000 - 21500) Net Realizable value after Write-off $728,500 (745000 - 16500) A/R $745000 (7,50,000 - 5,000) Allowance account $16,500 ( 21,500 - 5,000) Note: WRITE-OFF DOESNOT CHANGE THE VALUE OFNET REALIZABLE.

C

(Million)

2003

2004

SALES

8356

10550

A/R

1007.9

1461

Receivable Turnover = Sales / Average Accounts receivable 2004             = 10550 / {(1007.9 + 1461) / 2}             = 10550 / 1234.45             = 8.5 times

D

Cash flow generated bysales                = Sales Revenue + Beginning A/R - Ending A/R             = 10550 + 1007.9 - 1461             = $10096.9 million

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.