Xerox Corporation is the company that made the photocopier popular, although it now describes itself as a technology and services enterprise that helps businesses deploy document management strategies and improve productivity. Assume it recently disclosed the following information concerning the allowance for doubtful accounts in its annual report. 

Required: 

1. Create a T-account for the Allowance for Doubtful Accounts and enter into it the 2017 amounts from the above schedule. Then write the T-account in equation format to prove that the above items account for the changes in the account. 

2. Record summary journal entries for 2017 related to (a) estimating bad debt expense and (b) writing off specific balances. 

3. Supply the missing dollar amounts noted by ? for 2016 and 2015. 

4. If Xerox had written off an additional $20 million of accounts receivable during 2017 and the ending allowance balance was estimated to be $131 million, how would that have affected Net Accounts Receivable? How would the write-off have affected Net Income? Explain.

Transcribed Image Text:

SCHEDULE II Valuatlon and Qualifylng Accounts (In millions) Additions Charged to Bad Debt Expense Allowance for Balance at Balance at Doubtful Accounts Beginning of Year Write-Offs End of Year 2017 $ 128 $72 $ 69 $ 131 2016 116 42 128 2015 136 27 ? 116