Warren SM_Ch.09_final - CHAPTER 9 EXERCISES Ex 91 Accounts...

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CHAPTER 9 EXERCISES Ex. 9–1 Accounts receivable from the U.S. government are significantly different from re- ceivables from commercial aircraft carriers such as Delta and United. Thus, Boe- ing should report each type of receivable separately. In the December 31, 2007, filing with the Securities and Exchange Commission, Boeing reports the receiv- ables together on the balance sheet, but discloses each receivable separately in a note to the financial statements. Ex. 9–2 a. MGM Mirage: 19.9% ($90,024,000 ÷ $452,945,000) b. Johnson & Johnson: 1.8% ($160,000,000 ÷ $8,872,000,000) c. Casino operations experience greater bad debt risk, since it is difficult to control the creditworthiness of customers entering the casino. In addition, individuals who may have adequate creditworthiness could overextend them- selves and lose more than they can afford if they get caught up in the excite- ment of gambling. In contrast, Johnson & Johnson’s customers are primarily other businesses such as grocery store chains. Ex. 9–3 Feb ......................................................................................... 23 Accounts Receiv- able—Dr. Judith Salazar ......................................................... 41,500 ................................................................................................... Sales ................................................................................................... 41,500 ............................................................................................... 23 Cost of Merchand- ise Sold ..................................................................................... 22,300 ................................................................................................... Merchand- ise Inventory ............................................................................. 22,300 May ........................................................................................ 10 Cash ........................................................................................ 10,000 ................................................................................................... Bad Debt Expense ................................................................................................... 31,500
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................................................................................................... Accounts Receivable—Dr. Judith Salazar .............................................. 41,500
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