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Question: (Revenue and expense recognition; cash flow analysis] The Stengel Company showed the following pattern of sales. bad debt expense. and net receivables for 1997 through 2001 (in $ millions)

a. Calculate the cash collected from customers each year from 1997 to 2001.

b. For each year presented. calculate the following ratios:

(i) Bad debt expense/mica

(ii) Net receivables/sales

(iii) Cash collections/sales

c. Based on the patterns of sales. net receivables. and cash col-lections in part A and ratios calculated in part B, discuss the adequacy of the provision for bad debts.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92331347

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