Nature of Uncollectible Accounts MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $562,947,000 and allowance for doubtful accounts of $89,602,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, J&J reported accounts receivable of $11,260,000,000 and allowance for doubtful accounts of $275,000,000. a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM. Round your answer to one decimal place.

the percentage of the allowance for doubtful accounts to the accounts receivable for MGM  15.92%

Explanation:

MGM  accounts receivable  $562,947,000

MGM Allowance for doubtful accounts $89,602,000

% of MGM allowance for doubtful accounts to the accounts receivable = Allowance for doubtful accounts / Net Accounts Receivable* 100

=$89,602,000/ $562,947,000 (*100)= 15.916= 15.92%

We can check the answer by applying the percentage to the given amount of the accounts receivable = 15.92% of $562,947,000= $ 89621,162 which is almost the same as $89,602,000. We get the slight difference in the numbers due to the rounding off as the actual percentage was 15.916

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