Uncollectible Accounts ken, is a worldwide supplier of athletic products. Its balance sheet on May 31, 2003, included the following data (S in millions): Accounts receivable, less allowance for doubtful accounts of $87.9 $2,101.1 1. The company uses the allowance method for accounting for bad debts. The company added $33 million to the allowance during the year ending May 31, 2003. Write-offs of uncollectible accounts were $25.5 million. Show

(a) the impact on the balance sheet equation of these trans- actions and

(b) the journal entries. 2. Calculate the allowance balance on May 31, 2002. 3. Suppose Nike had used the specific write-off method for accounting for bad debts. By using the same information as in requirement 1, show

(a) the impact on the balance sheet equation and

(b) the journal entry. 4. How would these Nike balance sheet amounts have been affected if the specific write-off method had been used up to that date? Be specific.