Question

A note disclosed that the allowance for uncollectible accounts had a balance of $42.4 million and $39.7 million at the end of 2015 and 2014, respectively. Bad debt expense for 2015 was $30.0 million. Required:Determine the amount of cash collected from customers during 2015. (All sales are on credit. Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Answer 1

Answer:

Allowance for uncollectible accounts: ($ in millions)

Balance, beginning of year            $39.7

Add: Bad debt expense                 $30.0

Less: End of year balance              ($42.4)

Write ­offs during the year              $27.3

Accounts receivable analysis:

Balance, beginning of year ($2,076.6 + $39.7) $2,116.3

Add: Credit sales                                            $19,281.6

Less: Write­offs                                                ($27.3)

Less: Balance end of year ($2,949.4 + $42.4) ($2,991.8)

Cash collections                                             $18,378.8