Reference no: EM132909811

Question - Aging of Accounts Receivable - The Miller Company's accounts receivable reveal the following balances by age category:

The allowance for uncollectible accounts has an existing positive balance of $13,680. The company's internal auditors suggest that the following percentages be used to estimate the amount of outstanding receivables that will eventually prove to be uncollectible.

1) Calculate the projected new balance for (a) the allowance for uncollectible accounts and (b) the bad debts expense.

Star Communications designs, manufactures, and sells telecommunication equipment, and provides services associated with their installation, operation, and maintenance in China, India, Korea, and Vietnam.

During 2005, the company's share price traded as high as $23 per share.

But, in January, 2005, the company disclosed that it would file its Form 10-K with the U.S. Securities and Exchange Commission late due to material internal control problems identified by its independent auditor, PricewaterhouseCoopers.

One of the identified concerns related to the company's recording of revenue and the related accounts receivable. In response, the company's share price sank to $6 per share. Following are selected financial data from Star Communications' 2004 annual report:

1. Calculate Star Communications' receivable collection period for 2003 and 2004. Round to two decimal places.

2. If the company could improve its receivable collection period to the industry average of 60 days, how much additional cash flow from accounts receivable would have been generated in 2003 and 2004?