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Compute the percentage of allowance for doubtful accounts

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Reference no: EM132709558

Problem - Nature of uncollectible accounts - MGM Resorts International (MGM) owns and operates casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. For a recent year, the MGM Resorts International reported accounts and notes receivable of $562,947,000 and allowance for doubtful accounts of $89,602,000.

International Business Machines (IBM) provides information technology services, including software, worldwide. For a recent year, IBM reported notes and accounts receivable of $9,426,000,000 and allowance for doubtful accounts of $336,000,000.

Required -

a. Compute the percentage of the allowance for doubtful accounts to the accounts and notes receivable for MGM.

b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for IBM.

c. Discuss possible reasons for the difference in the two ratios computed in (a) and (b).

Reference no: EM132709558

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