Following is information from the Fitbit Inc. financial statements. $ thousands Dec. 31, 2018 Dec. 31,...
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Following is information from the Fitbit Inc. financial statements. $ thousands Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 $1,511,983 $1,615,519 $2,169,461 477,825 414,209 406,019 Revenue Accounts receivable, net Allowance for Doubtful Accounts ($ thousands) 2018 2017 Beginning balance Increases Write-offs Ending balance 2016 $9,229 $282 $1,825 56 30,551 339 (5,543) (21,604) (1,882) $3,742 $9,229 $282 Customer Bankruptcy In September 2017, Wynit Distribution filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Wynit was the Company's largest customer, historically representing 11% of total revenue during the six months ended July 1, 2017 and 19% of total accounts receivables as of July 1, 2017. In connection with Wynit's bankruptcy filing, the Company believed that the collectability of the product shipments to Wynit during the third quarter of 2017 was not reasonably assured. However, as of July 1, 2017, collectability of accounts receivables from Wynit was reasonably assured. The Company ceased to recognize revenue from Wynit, which totaled $8.1 million during the third quarter of 2017. Additionally, the Company recorded a charge of $35.8 million during the third quarter ended September 30, 2017 comprised of cost of revenue of $5.5 million associated with shipments to Wynit in the third quarter of 2017 and bad debt expense of $30.3 million associated with all of Wynit's outstanding accounts receivables. c. What amount of bad debts expense did Fitbit report in its income statement for each of the years 2016 through 2018? (Hint: Calculate the common-size expense.) Note: Round answers to one decimal place (example: 0.2345 = 23.5%). Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 % % % % Bad debt expense / Revenue Following is information from the Fitbit Inc. financial statements. $ thousands Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 $1,511,983 $1,615,519 $2,169,461 477,825 414,209 406,019 Revenue Accounts receivable, net Allowance for Doubtful Accounts ($ thousands) 2018 2017 Beginning balance Increases Write-offs Ending balance 2016 $9,229 $282 $1,825 56 30,551 339 (5,543) (21,604) (1,882) $3,742 $9,229 $282 Customer Bankruptcy In September 2017, Wynit Distribution filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Wynit was the Company's largest customer, historically representing 11% of total revenue during the six months ended July 1, 2017 and 19% of total accounts receivables as of July 1, 2017. In connection with Wynit's bankruptcy filing, the Company believed that the collectability of the product shipments to Wynit during the third quarter of 2017 was not reasonably assured. However, as of July 1, 2017, collectability of accounts receivables from Wynit was reasonably assured. The Company ceased to recognize revenue from Wynit, which totaled $8.1 million during the third quarter of 2017. Additionally, the Company recorded a charge of $35.8 million during the third quarter ended September 30, 2017 comprised of cost of revenue of $5.5 million associated with shipments to Wynit in the third quarter of 2017 and bad debt expense of $30.3 million associated with all of Wynit's outstanding accounts receivables. c. What amount of bad debts expense did Fitbit report in its income statement for each of the years 2016 through 2018? (Hint: Calculate the common-size expense.) Note: Round answers to one decimal place (example: 0.2345 = 23.5%). Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 % % % % Bad debt expense / Revenue
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In this case the common size expenses are percentages of Net Sales Therefore ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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