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How to calculate cash with the numbers of sales,bad debt expense and net receivables?


How to calculate the cash collected (in $ millions) from customers?
Sales: $140
Bad debt expense: 7
Net receivables: 40
Acutally,the chart looks like this:

1997 1998 1999 2000
Sales $140 $150 $165 $175
Bad debt expense 7 7 8 10
Net receivables* 40 50 60 75
*at year end in 1996
=30

Is it really just "sales minus (bad debt expense+Net receivables)"??no trap?

538 day(s) ago

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Answers (1)

SteinS 		You subtract the bad debt expense from the sales. The receivables is money due you, that you have not collected yet therefore cannot be cash. The part I am fuzzy on is should you also subtract the receivables from the sales as well, as you sold the stuff, you just did not get the cash for the stuff yet, so you would have included the receivables in the total sales, but you would not have had the cash..

I am going to say $93 million dollars, and that's my final answer

Posted 538 days ago

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