Analyzing changes in accounts receivable. Selected data from the financial statements of American Express appear below (amounts in millions).

a. Prepare journal entries for Year 5, Year 6, and Year 7 for the following events:
(1) Revenues on account (2) Provision for estimated uncollectibles (3) Write-off of actual uncollectible accounts (4) Collection of cash from customers

b. Compute the amount of the following ratios:
(1) Accounts receivable turnover ratio for Year 5, Year 6, and Year 7 (2) Provision for estimated uncollectibles divided by revenues for Year 5, Year 6, and Year 7 (3) Allowance for uncollectible accounts divided by accounts receivable (gross) at the end of Year 5, Year 6, and Year 7

(4) Write-offs of actual uncollectible accounts divided by average accounts receivable (gross) for Year 5, Year 6, and Year 7

c. What do the ratios computed in part \(\mathbf{b}\) suggest about the collection experience of American Express during the three-year period?

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Balance Sheet Accounts and Notes Receivable, net of allowance for uncollectible accounts of $1,419 at the end of Year 4, $1,411 at the end of Year 5, $1,559 at the end of Year 6, and $1,728 at the end of Year 7 ... Income Statement Revenues on Account. Provision for Estimated Uncollectibles Year 4 Year 5 Year 6 Year 7 $41,883 $43,278 $50,049 $56,631 $19,132 $21,278 $23,675 $ 2,187 $ 2,212 $ 2,439