Question

Nature of Uncollectible Accounts 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 $562,947,000 and allowance for doubtful accounts of $89,602,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, J&J reported accounts receivable of $11,260,000,000 and allowance for doubtful accounts of $275,000,000. a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM. Round your answer to one decimal place.

Answer 1

the percentage of the allowance for doubtful accounts to the accounts receivable for MGM 15.92%

Step-by-step explanation:

MGM accounts receivable $562,947,000

MGM Allowance for doubtful accounts $89,602,000

% of MGM allowance for doubtful accounts to the accounts receivable = Allowance for doubtful accounts / Net Accounts Receivable* 100

=$89,602,000/ $562,947,000 (*100)= 15.916= 15.92%

We can check the answer by applying the percentage to the given amount of the accounts receivable = 15.92% of $562,947,000= $ 89621,162 which is almost the same as $89,602,000. We get the slight difference in the numbers due to the rounding off as the actual percentage was 15.916