Merck & Company reported the following from its 2016 financial statements. $ millions Accounts receivable, net...
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Merck & Company reported the following from its 2016 financial statements. $ millions Accounts receivable, net Allowance for doubtful accounts a. Compute accounts receivable gross for each year. 2013 2014 $ millions Accounts receivable, gross $ 2013 2014 2015 2016 $7,666 $7,105 $6,965 $7,499 170 179 191 225 % allowance $ % 2015 $ b. Determine the percentage of allowance to gross account receivables for each year. Round answers to two decimal places (ex: 0.02345 = 2.35%). 2013 2014 2016 % 2015 $ 2016 c. Assume that we want to reformulate the balance sheet and income statement to reflect a constant percentage of allowance to gross accounts receivables for each year. Compute the four-year average and then reformulate the balance sheet and income statements for each of the four years. assume a tax rate of 35%. Four-year average of percentage of allowance to gross accounts receivables. Round answer to two decimal places (ex: 0.02345 = 2.35%) Reformulate the balance sheet and income statements. • Use rounded answer above for computations, then round answers to one decimal place. • Use negative signs with answers to indicate the adjustment decreases an account. Adjusted allowance for doubtful accts. $ Balance Sheets Adjustments Allowance for doubtful accounts Accounts receivable, net Deferred tax liabilities Retained Earnings Income Statements Adjustments Bad debts expense Income tax expense at 35% Net Income 2013 2014 2015 2016 Merck & Company reported the following from its 2016 financial statements. $ millions Accounts receivable, net Allowance for doubtful accounts a. Compute accounts receivable gross for each year. 2013 2014 $ millions Accounts receivable, gross $ 2013 2014 2015 2016 $7,666 $7,105 $6,965 $7,499 170 179 191 225 % allowance $ % 2015 $ b. Determine the percentage of allowance to gross account receivables for each year. Round answers to two decimal places (ex: 0.02345 = 2.35%). 2013 2014 2016 % 2015 $ 2016 c. Assume that we want to reformulate the balance sheet and income statement to reflect a constant percentage of allowance to gross accounts receivables for each year. Compute the four-year average and then reformulate the balance sheet and income statements for each of the four years. assume a tax rate of 35%. Four-year average of percentage of allowance to gross accounts receivables. Round answer to two decimal places (ex: 0.02345 = 2.35%) Reformulate the balance sheet and income statements. • Use rounded answer above for computations, then round answers to one decimal place. • Use negative signs with answers to indicate the adjustment decreases an account. Adjusted allowance for doubtful accts. $ Balance Sheets Adjustments Allowance for doubtful accounts Accounts receivable, net Deferred tax liabilities Retained Earnings Income Statements Adjustments Bad debts expense Income tax expense at 35% Net Income 2013 2014 2015 2016
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Lets go through the calculations step by step to answer each part of the question a Compute accounts receivables gross for each year from 2013 to 2016 Accounts Receivables Gross Accounts Receivables N... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
Posted Date:
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