Reading 3M Company’s Balance Sheet: Accounts Receivable The following current as
ID: 2493691 • Letter: R
Question
Reading 3M Company’s Balance Sheet: Accounts Receivable The following current asset appears on the balance sheet in 3M Company’s Form 10-K for the year ended December 31, 2012 (amounts in millions of dollars): Use this information to answer the following questions. Enter dollar amounts in millions. Required: 1. What is the balance in 3M Company’s Allowance for Doubtful Accounts at the end of 2012 and 2011? 2012 $ _________________ million 2011 $ _________________ million 2. What is the net realizable value of 3M Company’s accounts receivable at the end of each of these two years? 2012 $ _________________ million 2011 $ _________________ million
Explanation / Answer
Requirement 1:
Balance in 3M Company's Allowancce for Doubtful Accounts:
Allowance for Doubtful Accounts = Bad debt / Doubtful Accounts
2012 - 105m
2011 - 108m
Requirement 2:
Net Realizable Value of 3M Company's accounts Receivable:
Net Realizable Value of Accounts Receivable = Accounts Receivable, net
= Accounts Receivable, Gross - Bad debt / Doubtful Accunts
2012 - 4.06 b
2011 - 3.87 b
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