Microsoft Corporation develops, produces, and markets a wide range of computer software, including the Windows operating system.

Question:

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

June 30, 2017 June 30, 2016 Accounts Receivable, Net of Allowances of $153 and $117 $13,589 60,420 $11,338 51,122 Net Revenues

Assume that, according to its annual report, Microsoft recorded Bad Debt Expense of $88 million and did not recover any previously written off accounts during the year ended June 30, 2017.

Required:

1. What amount of accounts receivable was written off during the year ended June 30, 2017?

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

3. Does your answer in requirement 2 suggest the collectibility of Accounts Receivable improved (or deteriorated) in 2017, relative to 2016 when the turnover was 4.6?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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