Nike, Inc., is a leading manufacturer of sports apparel, shoes, and equipment. T
ID: 2546667 • Letter: N
Question
Nike, Inc., is a leading manufacturer of sports apparel, shoes, and equipment. The company's 2013 financial statements contain the following information (in millions): A note disclosed that the allowance for uncollectible accounts had a balance of $115 million and $102 milion at the end of 2013 and 2012, respectively. Bad debt expense for 2013 was $43 million. 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 2013 and 20127 (Enter your answers in millions.) 2What is the amount of bad debt write-offs during 2013? Enter your answers in millions.) Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2013. (Enter your answers in millions.) Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2013. (Enter your answers in millions.)Explanation / Answer
Answer
Allowance for Uncollectable accounts
Opening Balance [2012]
$102
Add: Bad Debt Expense [2013]
$43
Less: Ending balance [2013]
$115
Bad debts write off
$30
Working
Beginning Balance [2012]
$3839
Add: Sales
$27018
Less: Write offs
$30
Less: Ending Balance
$3837
Collection from receivables
$26990
Answer
Gross Accounts Receivables
Beginning Balance
$3839
$30
Write Offs
Sales
$27018
$26990
Collections
$3837
Ending Balance
Ending Balance
$3837
Working
Beginning Balance [2012]
3737
Add: Sales
27018
Add: Write offs
30
Less: Write offs
30
Less: Bad Debt Expense
43
Less: Ending Balance
3722
Collection from receivables
$26990
Answer
Net Accounts receivables
Beginning Balance
$3737
$30
Write Offs
Sales
$27018
$26990
Collections
Write Offs
$30
$43
Bad debt expense
$3722
Ending Balance
Ending Balance
$3722
Allowance for Uncollectable accounts
Opening Balance [2012]
$102
Add: Bad Debt Expense [2013]
$43
Less: Ending balance [2013]
$115
Bad debts write off
$30
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