MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $415,654,000 and allowance for doubtful accounts of$93,760,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, Johnson & Johnson reported accounts receivable of $10,114,000,000 and allowance for doubtful accounts of$340,000,000.

b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable, for Johnson & Johnson. Round to one decimal place.

MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $\$ 592,937,000$ and allowance for doubtful accounts of $\$ 101,207,000$ Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, Johnson & Johnson reported accounts receivable of $\$ 11,775,000,000$ and allowance for doubtful accounts of $\$ 466,000,000$.

b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Johnson & Johnson. Round to one decimal place.

Cedar Springs Company completed the following selected transactions during June:

June 1. Established a petty cash fund of $\$ 1,000$.

12. The cash sales for the day, according to the cash register records, totaled $\$ 9,440$. The actual cash received from cash sales was $\$ 9,506$.

13. Petty cash on hand was $\$ 46$. Replenished the petty cash fund for the following disbursements, each evidenced by a petty cash receipt:

$\quad$ June 2. Store supplies, $\$ 375$.

$\quad \quad$ 10. Express charges on merchandise purchased, $\$ 105$ (Merchandise Inventory).

$\quad \quad$ 14. Office supplies, $\$ 85$.

$\quad \quad$ 15. Office supplies, $\$ 90$.

$\quad \quad$ 18. Postage stamps, $\$ 33$ (Office Supplies).

$\quad \quad$ 20. Repair to fax, $\$ 100$ (Miscellaneous Administrative Expense).

$\quad \quad$ 21. Repair to office door lock, $\$ 25$ (Miscellaneous Administrative Expense).

$\quad \quad$ 22. Postage due on special delivery letter, $\$ 9$ (Miscellaneous Administrative Expense).

$\quad \quad$ 28. Express charges on merchandise purchased, $\$ 110$ (Merchandise Inventory).

30. The cash sales for the day, according to the cash register records, totaled $\$ 13,390$. The actual cash received from cash sales was $\$ 13,350$.

31. Increased the petty cash fund by $\$ 200$.

Instructions

Journalize the transactions.

Journalize the following transactions, using the allowance method of accounting for uncollectible receivables:

Feb.   12.   Received $800 from Leo Jorgenson and wrote off the remainder owed of$2,400 as uncollectible. May    3.    Reinstated the account of Leo Jorgenson and received $2,400 cash in full payment.

MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $415,654,000 and allowance for doubtful accounts of$93,760,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, Johnson & Johnson reported accounts receivable of $10,114,000,000 and allowance for doubtful accounts of$340,000,000.

Use the data in the two preceding exercises to analyze the accounts receivable turnover ratios of H.J. Heinz Company and The Limited Brands Inc.

Use the data in the two preceding exercises to analyze the accounts receivable turnover ratios of H.J. Heinz Company and The Limited Brands Inc.

b. Does The Limited Brands or H.J. Heinz Company have the higher average accounts receivable turnover ratio?

Use the data in the two preceding exercises to analyze the accounts receivable turnover ratios of H.J. Heinz Company and The Limited Brands Inc.

a. Compute the average accounts receivable turnover ratio for The Limited Brands Inc. and H.J. Heinz Company for the years shown in the two preceding exercises.

The Limited Brands Inc. sells women’s clothing and personal health care products through specialty retail stores including Victoria’s Secret and Bath & Body Works stores. The Limited Brands reported the following (in millions) for two recent years:

Assume that accounts receivable (in millions) were $313 at the beginning of Year 1.

c. What conclusions can be drawn from these analyses regarding The Limited Brands’ efficiency in collecting receivables?

The Limited Brands Inc. sells women’s clothing and personal health care products through specialty retail stores including Victoria’s Secret and Bath & Body Works stores. The Limited Brands reported the following (in millions) for two recent years:

Assume that accounts receivable (in millions) were $313 at the beginning of Year 1. b. Compute the day’s sales in receivables for Year 2 and Year 1. Round to one decimal place.

The Limited Brands Inc. sells women’s clothing and personal health care products through specialty retail stores including Victoria’s Secret and Bath & Body Works stores. The Limited Brands reported the following (in millions) for two recent years:

Assume that accounts receivable (in millions) were $313 at the beginning of Year 1.

a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place.

H.J. Heinz Company was founded in 1869 at Sharpsburg, Pennsylvania, by Henry J. Heinz. The company manufactures and markets food products throughout the world, including ketchup, condiments and sauces, frozen food, pet food, soups, and tuna. For two recent years, H.J. Heinz reported the following (in thousands):

Assume that the accounts receivable (in thousands) were $1,171,797 at the beginning of Year 1.

c. What conclusions can be drawn from these analyses regarding Heinz’s efficiency in collecting receivables?

H.J. Heinz Company was founded in 1869 at Sharpsburg, Pennsylvania, by Henry J. Heinz. The company manufactures and markets food products throughout the world, including ketchup, condiments and sauces, frozen food, pet food, soups, and tuna. For two recent years, H.J. Heinz reported the following (in thousands):

Assume that the accounts receivable (in thousands) were $1,171,797 at the beginning of Year 1.

An accounting clerk for Chesner Co. prepared the following bank reconciliation:

$$\begin{array}{c} \textbf{Chesner Co.}\\ \textbf{Bank Reconciliation}\\ \textbf{July 31, 2014} \end{array}$$

$$\begin{array}{lrrrr} {\text{Cash balance according to company's records}}&&\$\hspace{5pt}11,100\\ {\text{Add: Outstanding checks}}&\$\hspace{5pt}3,585\\ \hspace{24pt}\text{Error by Chesner Co. in recording Check}\\ \hspace{30pt}\text{No. 1056 as \$950 instead of \$590}&\text{360}\\ \hspace{24pt}\text{Note for \$12,000 collected by bank, including interest}&\text{\underline{\hspace{8pt}{12,480}}}&\text{\underline{\hspace{10pt}{16,425}}}\\ &&\text{\$\hspace{5pt}27,525}\\ {\text{Deduct: Deposit in transit on July 31}}&\$\hspace{5pt}7,200\\ \hspace{37pt}\text{Bank service charges}&\text{\underline{\hspace{25pt}{25}}}&\text{\underline{\hspace{15pt}{7,225}}}\\ \text{Cash balance according to bank statement}&&\underline{\underline{\$\hspace{5pt}\text{20,300}}}\\ \end{array}$$

b. If a balance sheet were prepared for Chesner Co. on July 31, 2014, what amount should be reported for cash?