Daimler AG is a globally leading producer of premium passenger cars and the largest manufacturer of commercial vehicles in the world. Its group of businesses includes Mercedes- Benz Cars, Daimler Trucks, Daimler Financial Services, Mercedes- Benz Vans, and Daimler Buses. In a recent annual report, it disclosed the following information concerning its allowance for doubtful accounts:

Required:
1. Record summary journal entries related to bad debts for the current year. Ignore the currency translations and other changes.
2. If Daimler had written off an additional ‚¬ 10 million of trade receivables during the period, how would net receivables and net earnings have been affected? Explain.

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Allowances. Changes in the allowance account for receivables from financial service were as follows: 2012 946 370 2010 1,084 1,169 534 (235) 213) (439) (132) (299 (241) 62 1,084 2011 ( ) Balance at January 1 Charged to costs and expensee Amounts written off Reversals Curency translation and other changes 20 Balance at December 31 Source: Daimler AG, Annual Report 2012. in millions of euros 394 es 11 938 946