Mandalay Resort Group owns and operates casinos at several of its hotels, located primarily in Nevada. At the end of one fiscal year, the following accounts and notes receivable were reported (in thousands):
|
Hotel accounts and notes receivable |
$31,724 |
|
|
Less: Allowance for doubtful accounts |
1,699 |
|
|
|
|
$30,025 |
|
Casino accounts receivable |
$44,139 |
|
|
Less: Allowance for doubtful accounts |
12,300 |
|
|
|
|
31,839 |
a. Compute the percentage of the allowance for doubtful accounts to the gross hotel accounts and notes receivable for the end of the fiscal year.
b. Compute the percentage of the allowance for doubtful accounts to the gross casino accounts receivable for the end of the fiscal year.
c. Discuss possible reasons for the difference in the two ratios computed in (a) and (b).