Using Financial Statement Disclosures to Infer Write-offs and Bad Debt Expense and to Calculate the Receivables Turnover Ratio

Microsoft Corporation develops, produces, and markets a wide range of computer software including the Windows operating system. Microsoft reported the following information about Net Sales Revenue and Accounts Receivable (all amounts in millions).

   

	June 30, 2008	June 30, 2007
Accounts Receivable, Net of Allowances of $153 and $117	$13,589	$11,338
Net Revenues,	60,420	51,122

 According to its Form 10-K, Microsoft recorded Bad Debt Expense of $5 and did not recover any previously written off accounts during the year ended June 30, 2013.

Required:

1. What amount of accounts receivable was written off during the year ended June 30, 2008?

2. What was Microsoft's receivables turnover ratio (to one decimal place) in the current year?
 

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Microsoft Corporation. Microsoft Corporation.

Answer rating: 100% (QA)

Step 1 of 5 A Allowance method Allowance method is a method of writing off of bad debts expense In t... View the full answer