Following is information from the Fitbit Inc. financial statements.

$ thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue	$1,511,983	$1,615,519	$2,169,461
Accounts receivable, net	414,209	406,019	477,825

Allowance for Doubtful Accounts ($ thousands)	2018	2017	2016
Beginning balance	$9,229	$282	$1,825
Increases	56	30,551	339
Write-offs	(5,543)	(21,604)	(1,882)
Ending balance	$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.

Required

a. What amount do customers owe Fitbit at each of the year-ends 2016 through 2018?

$ thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounts receivable, gross	Answer	Answer	Answer

b. What percentage of its total accounts receivable does Fitbit deem uncollectible? (Percentage of uncollectible accounts = Allowance for uncollectible accounts/Gross accounts receivable.)

Round answers to one decimal place (example: 0.2345 = 23.5%).

	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
% allowance / AR gross	Answer	Answer	Answer

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.)

Round answers to one decimal place (example: 0.2345 = 23.5%).

	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
% Bad debt expense / Revenue	Answer	Answer	Answer

d. Calculate the average number of days that it took Fitbit to collect its receivables during 2018 and 2017.
Note: Do not round computations until your final answer, then round to one decimal place.

	Dec. 31, 2018	Dec. 31, 2017
Days sales outstanding	Answer	Answer

Answer rating: 100% (QA)

Days Sales Outstanding Average Accounts Receivable Net Revenue x 365 Acc... View the full answer