Individuals who may have adequate creditworthiness could overextend themselves and lose more than they can afford if they get caught up in the excitement of gambling. Casino operators have larger accounts receivable. Casino operators historically lose money on operations. Possible reasons for the difference in the two ratios computed in (a) and (b) include: a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Johnson & Johnson. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM Resorts International.
As of a recent year, Johnson & Johnson reported accounts receivable of $14,346,000,000 and allowance for doubtful accounts of $248,000,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aid® bandages and Tylenol®.
As of a recent year, MGM reported accounts receivable of $747,981,000 and allowance for doubtful accounts of $90,775,000.
MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada.
