The following information is from Hollywood Corporation's 2009 and 2010 year-end balance sheets and 2009 and 2010 income statements:

During 2010, Hollywood wrote-off a customer's $40,000 account receivable.
Required:
a. How much bad debt expense did Hollywood recognize in 2010?
b. If Hollywood prepares its statement of cash flows using the indirect method, how will bad debt expense appear on the statement of cash flows?
c. How much cash did Hollywood receive from its customers?
d. If Hollywood prepares its statement of cash flows using the direct method, how will cash receipts from customers appear on its statement of cash flows?

Question

The following information is from Hollywood Corporation's 2009 and 2010 year-end balance sheets and 2009 and 2010 income statements:
  
During 2010, Hollywood wrote-off a customer's $40,000 account receivable.
Required:
a.	How much bad debt expense did Hollywood recognize in 2010?
b.	If Hollywood prepares its statement of cash flows using the indirect method, how will bad debt expense appear on the statement of cash flows?
c.	How much cash did Hollywood receive from its customers?
d.	If Hollywood prepares its statement of cash flows using the direct method, how will cash receipts from customers appear on its statement of cash flows?

Quizplus · Accepted Answer

The Answer of The following information is from Hollywood Corporation's 2009 and 2010 year-end balance sheets and 2009 and 2010 income statements:
  
During 2010, Hollywood wrote-off a customer's $40,000 account receivable.
Required:
a.	How much bad debt expense did Hollywood recognize in 2010?
b.	If Hollywood prepares its statement of cash flows using the indirect method, how will bad debt expense appear on the statement of cash flows?
c.	How much cash did Hollywood receive from its customers?
d.	If Hollywood prepares its statement of cash flows using the direct method, how will cash receipts from customers appear on its statement of cash flows?

The Following Information Is from Hollywood Corporation's 2009 and 2010