Why Adequate Overdue Accounts Receivable?

Be Our Guest’s balance sheet shows good signs of liquidity. Current Ratios for the past four years have remained above 1 proving that the company can handle its current liabilities. The current ratios are not extremely high (19941.27, 1995- 2.17, 1996- 1.15 and 1997- 1.16), but they can cover the current liabilities. It is important to note that the company is operating on a thin line because the current assets are barely covering the current liabilities. This is particularly unpleasant because we are dealing with a company operating in a seasonal business. It is a concern that the current ratio slightly eroded after 1995, and this is primarily due to Be Our Guest converting the bank line into long term debt in

The company maintains a minimum cash balance of at least $50,000 at the end of each month. All borrowing is done at the beginning of a month; any repayments are made at the end of a month.

Answer: Aging schedules definitely help a company keep track of which of its customers are paying on time, and are useful in figuring cash flow. In this case, it is apparent that the majority of accounts receivable by the end of March are less than 30 days old (80.8%). By the end of June, that percentage goes down to 63.7%. By the end of March, 19.2% of accounts receivable are between 30-60 days old, and by the end of June, there is 36.3%. 0% of accounts receivable get to be over 60 days old, which indicates payment.

The business is receiving some discounts by paying within the 10 day discount period. This is a good idea to cut costs and have more cash available, but the business is not receiving payment from their customers in a timely manner. This is shown by the 9 day increase in receivable days since 2002, from 41.9 to 50.9 (exhibit).

| |financial statements related to cash and cash equivalents, receivables, and inventories. | | |

B. The company has a cash inflow as well as cash outflow for its investing activities. Cash inflow is from the sales of property and equipment while the cash outflow is from payment from capital from property and equipment. The largest item in investing activities was the purchase of property and equipment which resulted in a total of $98.2 million. (F-7)

An uncollectible account is an account has not been paid after all efforts such as Patient statements, patient phone contact and collection letters are all exhausted.

Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services on credit. These receivables are generally expected to be collected within 30 to 60 days. They are typically the most significant type of claim held by a company. Accounts receivable and notes receivable resulting from sales are also known as trade receivables. Accounts receivable resulting from sales are referred to as trade receivables in Alcatel's financial statements.

Mr. Wayne, CFO, provided the following information based on experience and management policy. All sales are credit sales and are billed the last day of the month of sale. Customers paying within 10 days of the billing date may take a 2 percent cash discount.

Even though CCL does not have issue with uncollectible, having an allowance account will provide CCL with the ability to write off debts such as the disputed shipment. Without being able to write off the shipment, will leave the Accounts Receivables overstated, which in turn leads to misstated financial statements. Having an AFDA would allow CCL to record the sale but also recognise that they do not expect payment from the client. Leaving this account on the accounts receivable would be misleading to CCL's stakeholders as it would lead them to believe that CCL is expecting to receive the cash in the near future. IF in the future, the dispute is resolved and the payment is received, CCL can recover the bad debt at that time.

The paperwork is needed so that the inventory can be check and figured out the true value of the inventory. A better way at looking any logical justification for cost or market inventory valuation is that a stock of items is necessary to expedite production and sales. If inventory become obsolescence, goes through physical deterioration, and price declines occur, or even if the stock when finally utilized cannot be expected to realize its stated cost plus a normal profit margin. Reduction in inventory value is an additional cost of the goods produced and sold during the time that they decline value occurred

Accounts payable are considered the total sum of monies or obligations owed to purveyors for goods and/or services purchased with credit. When accounts payable are paid off, it represents a negative cash flow for the company.

actual accounts, which can be considered as uncollectible, i.e. those that are already over 90 days. The balance

11. Accounts receivable turnover and days sales in accounts receivable for the last three years:

Assets in the financial statement are always required and show useful information to investors and understand where the information comes from. For instance, accounts receivable net which the organization does not expect to collect all of the money it is due from all patients and insurers, (Finkler, S.A., Ward, D.M. & Calabrese, I.D., 2013). The bad debts become about of the money due. Furthermore, accounts receivables, net represents gross charges less an allowance for poor debts, and many contractual allowances established with those third party payers. Typically, an example of a bad debt would show charges of a large sum of money delivered from a hospital. Then, the contractual allowances from