McConnell Products, Inc., located in New York City, is one of the world's largest producers of beauty
Question:
McConnell Products, Inc., located in New York City, is one of the world's largest producers of beauty and related products. The company's consolidated balance sheets for the 2015 and 2014 fiscal years included the following ($ in thousands):
2015 | 2014 | ||||
Current assets: | |||||
Receivables, less allowances of $23,316 in 2015 and $25,639 in 2014 | $ | 840,010 | $ | 759,700 | |
A disclosure note accompanying the financial statements reported the following ($ in thousands)
Year Ended | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Calculation of account receivables, net: | ||||||||
Receivables | $ | 863,326 | $ | 785,339 | ||||
Less: allowance for doubtful accounts | (9,088 | ) | (9,140 | ) | ||||
Less: reserve for product returns | (14,228 | ) | (16,499 | ) | ||||
Trade accounts receivable, net: | $ | 840,010 | $ | 759,700 | ||||
Assume that the company reported bad debt expense in 2015 of $3,000 and had products returned for credit totaling $3,380 (sales price). Net sales for 2015 were $6,224,800 (all numbers in thousands).
Required:
1. What is the amount of accounts receivable due from customers at the end of 2015 and 2014?
2. What amount of accounts receivable did McConnell write off during 2015?
3. What is the amount of McConnell's gross sales for the 2015 fiscal year?
4. Assuming that all sales are made on a credit basis, what is the amount of cash McConnell collected from customers during the 2015 fiscal year?
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas