The asset side of the 2016 balance sheet for BURLINGTON NORTHERN SANTA FE, LLC (BNSF) is below. The company reported total revenues of $19,829 million in 2016 and $21,967 million in 2015.
Required:
a. What proportion of gross accounts receivable does BNSF record as an allowance each year? Interpret the year-over-year change in the ratio.
b. Calculate the common-size amount for accounts receivable, net, for 2016 and 2015.
c. Compute the accounts receivable turnover for 2016 and 2015. At December 31, 2014, accounts and other receivables, net were $1,386 million.
d. Does the accounts receivable turnover you calculated above, seem reasonable for a railway company? Explain.

Question

The asset side of the 2016 balance sheet for BURLINGTON NORTHERN SANTA FE, LLC (BNSF) is below. The company reported total revenues of $19,829 million in 2016 and $21,967 million in 2015. 
  Required: 
a. What proportion of gross accounts receivable does BNSF record as an allowance each year? Interpret the year-over-year change in the ratio.
b. Calculate the common-size amount for accounts receivable, net, for 2016 and 2015.
c. Compute the accounts receivable turnover for 2016 and 2015. At December 31, 2014, accounts and other receivables, net were $1,386 million.
d. Does the accounts receivable turnover you calculated above, seem reasonable for a railway company? Explain.

Quizplus · Accepted Answer

The Answer of The asset side of the 2016 balance sheet for BURLINGTON NORTHERN SANTA FE, LLC (BNSF) is below. The company reported total revenues of $19,829 million in 2016 and $21,967 million in 2015. 
  Required: 
a. What proportion of gross accounts receivable does BNSF record as an allowance each year? Interpret the year-over-year change in the ratio.
b. Calculate the common-size amount for accounts receivable, net, for 2016 and 2015.
c. Compute the accounts receivable turnover for 2016 and 2015. At December 31, 2014, accounts and other receivables, net were $1,386 million.
d. Does the accounts receivable turnover you calculated above, seem reasonable for a railway company? Explain.

The Asset Side of the 2016 Balance Sheet for BURLINGTON