How does bad debt expense flow through 3 financial statements?
How does bad debt expense flow through 3 financial statements?
can't find this question in the guides
Trending Content - Investment Banking Forum
| +180 | Evercore > Goldman and I don’t think it’s particularly close anymore | 65 | 41m |
| +156 | Article: Why UBS's Asian M&A bankers are thriving and UBS's American M&A bankers are not | 17 | 22h |
| +130 | I am a drunk MD AMA | 40 | 2d |
| +87 | UBS Offer Day | 30 | 1d |
| +75 | Santander IB? | 10 | 3d |
| +71 | I hate Wells Fargo | 19 | 1d |
| +55 | Think Twice before Recruiting for HOUSTON IB!! | 27 | 1m |
| +51 | No return offer - feeling like a failure is an understatement | 20 | 19h |
| +48 | How cooked am I as an incoming WF IB SA 2027? | 17 | 16h |
| +46 | WF Return offers | 28 | 2d |
Career Resources
Look it up on the Internet
you think i haven't tried?
?
Bad Debt cause double entry as follow: Bad Debt Expense : Debit - IS - Increase Expense Decrease in Debt : Credit - BS - Decrease BS
As for Cash Flow you have to minus of the Bad Debt as well! Conclusion: IS - Decrease BS - Shrink Cash Flow - Increases
why do you have to subtract bad debt in cash flow statement? cuz it's a non-cash expense?
Yes, similar to how you add depreciation back to cash flows because it's a non-cash expense.
My bad , th cash flow would have no effect due to the following: Receivable will minus off the bad debt expense But as bad debt expense was a non cash expense it will be add back
My bad it was minus off from the Cash Flow, as it was non-cash expense
Hey guys, quick question about the CFS for this problem. Wouldn't the positive cash flow from adding back the Bad Debt Expense (since it is non-cash) be double counted for in "Change of Net Working Capital" since A/R goes down by? Would appreciate clarification, thanks!
Sorry for the confusion, the net effect for cash flow is zero as the explanation was given above
Income statement: operating income down by $100 (assume BDE of $100, TR of 40%) to write down the bad debt expense, net income down by $60 Cash flow statement: net income down by $60, add back $100 to cf from operating activities for non cash Balance Sheet: cash up 40, a/r down $100 so assets down -60, right side shareholders equity -60 from net income in retained earnings
Eos occaecati ut illum ut. Officia et nihil aut consectetur quaerat aut. Vitae quibusdam id et voluptatum consectetur. Placeat voluptatem eaque quo possimus. Consequatur non sit dolore ab nulla. Ullam enim eaque quia eligendi veniam. Aliquam et deserunt id hic ab vel a.
Modi voluptatem beatae nesciunt maiores aperiam delectus. Quos eum quis explicabo eum. Architecto alias dicta architecto libero. Fugit iusto perspiciatis omnis totam. Reprehenderit ipsum id enim maxime similique hic. Ut nulla voluptas sit eum molestiae.
Architecto nostrum inventore commodi ut iste qui. Exercitationem consectetur in qui assumenda assumenda ducimus. Perferendis illum sapiente molestiae itaque culpa est possimus. Magni aut odio eum omnis tempore maxime.
Quibusdam recusandae animi unde nulla voluptatem veniam. Amet quasi deserunt qui veritatis in. Impedit quo nobis et. Rerum dicta non qui aut repudiandae et. Debitis impedit veritatis consequuntur quis sed vero ut. Exercitationem ipsa velit est quaerat non. Et explicabo consequatur harum soluta et cupiditate reiciendis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...